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Can I restore it to the factory settings? I do have the Setup Boot Disk but it doesnt work anymore.
Thanks

Do you have the OS CD? What do you mean by "Setup Boot Disk?" A boot floppy?
"So won’t you give this man his wings
What a shame
To have to beg you to see
We’re not all the same
What a shame" - Shinedown

You can probably boot from the cd. Is it a restore disk or a regular 98 installation disk?
A restore disk would have all the necessary drivers and any additional software that came with the PC. The 98 disk will only have the OS and might be missing some drivers.

The cd is the 98 installation disk.
The floppy was damaged. I have used it a couple of times before to restore factory settings.

Installing from the Win98 CD means you will lose the updates and they aren't available from Microsoft anymore. You would also need to find and then install any hardware drivers. This is all doable but maybe unnecessary.
If your computer is not running well it may be possible to fix that without re-installing.
Why do you want to restore to factory settings?

The computer is really slow, in the past when it became like this I just used the restore disk.

Better to just cleanup it up.
Download and run often CCleaner. Click on the link below to get it. Run the cleaner module often and the registry module occasionally. When using the registry module allow CCleaner to make a backup of what it finds and then fix. After a few days if all is well then delete the backup. CCleaner is freeware.
http://www.ccleaner.com/download
Let us know how that works for you. If you still need to re-install then we can help you with that.

Kind of confusing here. You have the 98 installation cd but in the past you used the restore cd. Your bootdisk is bad but that's no big deal. You say you've used that bootdisk previously to 'restore factory settings'. I don't think that's possible.
If you've got the restore cd then why not use it instead of the 98 cd?
And the best way to keep your PC from slowing down is not to put so much junk software on it. Get rid of your anti virus software. No legitimate software slows down your PC more than that. You don't seem to have a problem with periodically reinstalling windows so why bother adding the software that slows it down the most?

Dave: Do you really think it's wise to have no antivirus software at all? I use AVG and it seems to use little resourses and I see no slow-down. Can't say the same for McAfee and Norton.
I'm interested in your opinion.

Yeah, it's almost sacrilegious to advocate no AV software. In my case I'm not set up for any file sharing and rarely end up on any malicious sites. Every so often I do a DIR/O:D from a command prompt in the windows, system and temp folders to see if any new files have shown up. (Almost always malware files show the time and date of their download so they're easy to find.) Any file I'm not sure of I can google to find out if it's legit.
I'll admit most of my AV experience has been with Norton and Mcafee. They're resource hogs and often create more problems than they solve. I guess they've turned me off to all AV software.
I usually use a 98 machine and the few times I got infected I just deleted the files, did a scanreg/restore and I'm back in business.
If you ever check in the security/virus forum you can't help but notice, via hijackthis or malwarebyte logs, that the infected PCs are always running AV software. Many of those are massively infected with dozens of files from several different types of malware. Obviously too often AV software is just a placebo for the PC user.
I'm sure that most people are going to be better off running some kind of AV software. Even if it's not perfect it's better than nothing. But the OP here (unless I'm misunderstanding what he means by 'recovery disk') seems OK with a reinstall of his software. I'm just assuming he runs AV software because, well, everybody does.

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