Best guess: you have partitioned your USB drive strangely, so that for example there is a FAT filesystem in a partition overlapped by a NTFS filesystem on the whole drive. As both operating systems will check both options, but Win98 cannot read NTFS, they will detect different filesystems. That will still mean that both filesystems will be somehow "corrupted" (having information where it does not belong) but if your drive is large and there are only a few files on it, it might not appear for a long time.
Check Disk Management on Win2000 and fdisk on Win98 and compare their output. Or boot from a Linux live CD and check what files you see there and how the partitioning is like with cfdisk.
To clean this up, save all files you still need elsewhere, and fill all sectors of the drive (or only the first few megabytes) with zeroes, then partition and format your drive again (this time in a format that all your operating systems can read :))
And if any of your machines asks if they should re-format the drive, always say "no" (without cleaning the first sectors first), because that can in some obscure cases lead to such problems.
(It could also be a firmware/driver bug so that one of your OSes does not see some part of the drive, but if other USB drives work fine, this is not the real issue.)