I'm running a configuration similar to yours except my processor is 1.9 ghz and my OS is XPHome. FR was mid 60's...a bit higher than yours due to the faster chip, I suspect.
I'd advise you to keep what you have, for now, for the following reasons:
98SE has it's shortcomings but tends to be a pretty good gaming platform. XP is memory hungary and will put additional performance hit on your CPU.
XP doesn't co-habitate with analog equipment. Yeah, there are gameport/USB adaptors but most of the people I know who've tried linking analog to XP wind up pulling their hair out.
The word on the street is that AH2 will be more card dependant vs CPU. For that reason I recently purchased a Radeon 9800 Pro.
I was informed on a Dell support forum that the 250 watt power supply would handle the card. WRONG. Add $99 for a 400 watt PS to run a new $220 card. In attempting the 250 watt PS-Radeon hook-up, something went bazooey with my HD...stopped working, then worked...then stopped. Add another $99 for a 80 gig HD. I slaved back my old HD, which is allowing me access to old data. Meanwhile I went throught the pain of re-installing XP, old software, files, etc.
$420 bucks later I'm getting mid 70's FR on the FesterMA map. Thats $42 @ frame over my old G3 Ti-200 64 meg card. Why? Cause the CPU isn't really fast enough to tweak the performance the Rad9800 is capable of. Now I need to decide of I want to replace the MB + chipset (nuther$400) Total = $820 Heck, for $950 I can get a new Dell 4200 Dimension with P4 3.0 ghz chip, 512 meg memory, 120 gig HD, Rad9800 Pro 128 meg card, SB 5.1 sound card.
Simply put, I'm and idiot

To top it all off, there's apparantly a compatibility issue with AH2 and Radeon 9800's...tho Im told HTC's working on that.
Sorry to be so verbose but just wanted to walk you through my experience before you jump into the water.
DmdMax