Well okay,
I probably would've asked this on vmware forums if I couldn't find the info on google, but in this case I will try and help you as I can.
So let me get this straight, you have a Windows 98 installation on your hard drive that you can no longer access because you've upgraded the RAM to 1.5Gb?
I'm going to assume you've installed another OS (Mepis 6?) on your machine so that you can actually access it yes? Otherwise it'd be pretty useless, also you will need to be able to see the old Windows 98 files in your new OS but we'll get to that...
As far as the differences between VMWare Server and VMWare Player go... well with Server you can create virtual machines, but it is designed for specific server OS's and for running several operating systems on a single set of server hardware in a "headless" way... that is to say that clients across the network deal with the display and the VMWare Server runs as a service on the server in a non-graphical mode.
Player on the other hand is meant for single non-server PC's to run pre-made virtual machines, whilst you may be forgiven for thinking "what's the point in having a product with cut-down functionality", I'm sure you can think of some situations where it is conceivable to not let your users create their own VM's.
Player ALWAYS requires the user of the VM to be at the machine it is running on as that is where the VM is displayed... see? No? Well anyhow it doesn't matter...
I do use Server now though on a single, non-server PC and as far as filesharing goes it is exactly the same. Now down to business, you will have your actual OS (the one running on the hard drive) and your virtual machine running its own OS.
The actual OS is referred to as the "host" operating system, and the one running inside the virtual machine is referred to as the "guest" operating system.
To be able to copy files between the two using VMWare directly it is my understanding that your virtual machine must be setup to use bridged networking (it shares the same networking as the host) and that your machine is actually connected to a network (be this just a single hub).
Your host PC must also be able to see the old Windows 98 files.
Now to copy files between:
A windows host and a windows guest -
Setup Windows filesharing on the two PC's.
Providing they are on the same network workgroup and you've set the folder you want to copy into on the guest as "shared" so that anyone can read and write to it, the share should appear in My Network Neighbourhood/Places on the host and you can copy to it like you would any other hard drive.
A linux host and a windows guest -
You need to setup SAMBA on the linux host to see windows shares.
There are many good guides around on the internet for doing this so I won't go into it. When you have SAMBA setup and working the premise is pretty much the same... if you don't have a "network places" shortcut somewhere about the desktop or in the gnome/kde (etc) menu then the command line code to mount a samba share is:
mount -t smbfs -o username=<Windows system user account>,password=<password> //<guest machine name>/<share name> /<wherever you want the share mounted>
Of course changing the parts in "< >" to their appropriate equivalents.
Failing that or if you're not on a network but have external usb storage or CD/DVD writer capabilities, virtual machines can share the physical usb or CD/DVD drives of the host. So you can copy the files onto cd or usb drive on the host and then mount them in the virtual machine in VMWare Server (by right clicking their icons at the bottom of the screen and selecting the correct drive to use) and then copy the files off onto the virtual machines hard drive.
I hope that helps, if not search the internet for "setting up a virtual machine in VMWare", or "sharing files between a host and guest in VMWare".