Yep, Win98 definitely seemed sluggish... Win95, on the other hand, was basically targeting the same hardware requirements as Win 3.x. By the time Win 98 came out, we were well into the Pentium II era. Systems with 64 - 128 megs of RAM were becoming common.
I worked at a "startup" in the 98 to 99 (I put that in quotes since it was actually a subsidiary of a mid-sized corp pretending to be a startup.) The requirements for our app was Windows 98 with 64 megs of RAM minimum. We had a bunch of systems like that in our test lab and they basically were barely adequate. As developers, we were running NT 4 with 128 megs RAM on Xeon desktops. Those were pretty snappy boxes.