Im not sure myself of the technical reasons etc.
I use a memory optimization program called "cacheman"..it is sweet, ive used it on several w98se and ME systems.
It has a setting on the new version for exceeding 512M RAM on w98/ME systems. I think its referred to on the program as "fixing" the RAM, lol.
Anyway, here is the site
http://www.outertech.com/
I think they have a forum for cacheman and you can probably find some info there.
JP