Oh, don't bother - the problem was that I didn't know how Fraps actually were working. I thought it just captured whatever happened on the screen. Apparently... it didn't.
I am on win98 too and camtasia and fraps are running fine on. the only problems are that my fps while playing are going from 60-75 to 2-8 when recording with fraps, in addition of writing dozen of Mos's for every 6-8 sec of game, and with camtasia, the slowdown is less important (the game is still playable), but the movie is without sound and flickering, like watching a very old cartoon ...
I've been experimenting a little with Camtasia, and so far, the only way I can record 30fps without slowdown is by recording uncompressed. My problem now is that Camtasia drops lots of frames. Sometimes it records perfectly, but during some periods, the frame rate of the VIDEO drops to 1-2 fps, but when I was playing, it was fine. Is my hard drive too slow? I tried defragging, but it didn't seem to help.