Use the ICS software that comes with 98se and Me.
It's a while since I've used Win 9x setups but basically you run the Home Networking Wizard on PC1, the info <A HREF="http://www.dummies.com/Technology/Networking/Home_and_Small_Office/0-7645-0498-3_0001.html" target="_new"> here </A> should help.
PC1 will now act as a DHCP server. When PC2 is powered up, it will be assigned an IP address from PC1. PC2 doesn't have to be configured, A Win 98/Me machine with an ethernet card, will automatically obtain an IP address from a DHCP server, by default.
Run the internet connection wizard on PC2, tell it to connect over LAN.
That's it I think. Launch IE on PC2 and it will dial-up your ISP via PC1.