Windows 98SE most definitely does handle memory over 256MB. It does not however recognize memory over 512MB. Additionally, no one task can use more than 128MB. Upgrading the OS with only 256MB would not gain much, but would make a major improvement with just 384MB. And, since adding 256MB of memory is much cheaper than upgrading the OS, upgrading to 512MB should come first. The memory upgrade would address the 9mg free issue. However, closing applications that are not needed is always a good idea. The problem is trying to figure out what is needed. Generally speaking however, if you close an application that is needed, it will reopen on its own. As for the recommendation to buy two hard drives, since you already have one hard drive, buying another will give you two. Dale LaRoy Splitstone