I'm using Windows XP, but I think it's the same with 98. You have to 'drag and drop' the taskbar by catching it in the corner of the screen (you have to work at it). You can't just grab it by clicking IN the corner (exactly in the corner). As I remember, it's tricky I think you have to drag it straight downward to the bottom corner and it will automatically adjust because what you're dragging [to] is the location where you want the corner of the taskbar to be.
(if you accidentally did something to the START MENU AND TASK BAR while you were in Control Panel, you'll have to undo it)