I have no reason to think the USB ports won't work under Win98.
However, I'll feel more confident about it when someone is able to confirm that they're there. With a system like this, I'll always leave room for some unusual, proprietary hardware until I know better.
Also, some other straight-from-the-box machines only talk about connecting mice and keyboards (HID devices) to their USB ports. Although I do not know for sure, I'd imagine that it's possible to build HID-only controllers into the machine.
However, at the Gateway site, I believe they refer to mice, keyboards, and printers with other devices available in the future (CD-RW). So, I assume they're not crippled.
I'm trying to plan ahead a bit here. If I can only get an HPNA machine, I'll need to rig an ethernet connection. Personally, I don't care about the modem.