First, USR isn't trash. You're trying to use an OEM modem with no specific driver that came with it. You say it's a Win ME modem, and trying to use it on Win98. Interesting. If you had a modem in Win 98 and upgraded (loose term) to ME, sometimes it works but other times you need a ME driver (WDM = Windows device driver). I've never heard of a Win ME modem or Win 98 modem specific.
If there is such an animal, being backwards compatible in this case is an iffy. When you installed it, did you get any prompts for "select country"?
You may be beating your head against the wall. I've tried installing an OEM modem before w/o proper driver and it was tough.
http://www.microsoft.com/hwdev/driver/default.asp