I experienced, and solved, two small glitches installing
MSYS-1.0.7-i386-2.exe under Windows98 2nd ed.
1) Found the postinstall\pi.bat script is broken under Windows98,
since it is unpacked with LF line endings, rather than CR LF.
Fixing this with Notepad, and re-running the batch file BEFORE
the installer proceeds saved the day.
2) Got message about insufficient environement variables space.
Fixed that by adding at the end of C:\config.sys the line
C:\windows\command.com /E:2048 /P