If your going to do your updates, now is the best time, as theres less chance of anything going wrong at this point, and even if it does, all you have done is install Windows, no software or data will be lost since your already running fresh. To be honest Jor, I've never had problems updating myself, but it's completely your decision, I'm not going to decide for you.
This site gives you a breakdown of the 98 and 98SE critical and recommended updates (short descriptions of each):
Windows 98 Download: Windows Update
It may give you an idea of what each of these updates actually do. If your not running internet on 98 then you don't need to worry about the security updates. Other updates are normally bug fix's with 98 itself.