1. Arduino 1.0 cannot be started under Windows-98. Further more, when you try to install the USB driver for the serial port the program Msgsrv32 gives an error message.
With Windows-2000 you can run the IDE but the installation of the USB drivers is not supported.
So you can neither upload your program nor use the serial terminal.
But you can find a twelve step instruction on http://playground.arduino.cc/Main/UnoWin2k how to manage.
2. If you try with your old Pentium-MMX it won't work; the compiler cpp (version 4.3.2 and probably above) is using Pentium-instructions that Intel implemented only since Pentium-II (not III). When you try to compile using a MMX you get
C:\Arduino-1.0.1\hardware\arduino\cores\arduino\wiring.c: In function 'delay': C:\Arduino-1.0.1\hardware\arduino\cores\arduino\wiring.c:324: internal compiler error: Illegal instruction Please submit a full bug report, with preprocessed source if appropriate. See <URL:http://sourceforge.net/tracker/?atid=520074&group_id=68108&func=browse> for instructions
In fact, when scanning the library function wiring.c - in the very last line of that code - the old Pentium cpu will find an instruction that it does not know yet.
By the way: the link given in the error message is broken.
In the ...\hardware\tools\avr\doc\gcc\HTML directory you will find 613 html files telling you everything about gcc.
The system requirements tell you you need a CD-ROM drive. No, you don't. What you really need is access to the internet.
3. They tell you you need Java. No, you don't. Everything you need is contained in the software you download from http://www.arduino.cc/.
Good news: Arduino requires only USB 1. Neither on uploading nor while using the serial terminal you will benefit from using USB 2.