This is the link to the product info regarding KHP, and what's needed to run it. I believe you'll see that it requires 98SE, ME, 2000, and XP(PRO orHOME), but not 98. It also lists minimum system requirements to run KHP.
http://mtu.com/basics/karaoke-home-producer.htm
If you have 98SE, and the minimum system requirements then what zipped file are you talking about, and what error messages are you getting?
George