Enjoy the techno-babble...
Long story short, there is NOTHING really wrong with Win98, the problem is that VirtualBox's emulated BIOS doesn't fully match up with what Win98 expects a real ACPI BIOS to look like, so by default Win98 will not install ACPI support (and unfortunately, the older APM support doesn't handle CPU IDLE, so we get problems).
The solution is to FORCE ACPI support to be installed, by using the
/p j
command line switch when running the setup program that installs Win98.
This means that you can't just jam the virtual CD into the virtual CD drive and let 'autorun' take care of everything.
The best way to handle this is to simply move the Win98 install folder from the Windows 98 SE CD onto your virtual C: drive in VirtualBox, then change directory to that folder in a DOS prompt and run the setup program manually:
setup /p j
This will force ACPI power management (and the associated CPU IDLE functions) to be installed, and your Win98 virtual machine will consume no more system resources when running than a similar XP or Linux virtual machine.