That is a feature of Internet Explorer 4.x and 5.x and thus a feature of windows 98.
You can just drag the start menu entries where you want them.
Click start and then drag the entries you want to move.
If you have Internet Explorer 5.x installed, you can click on start and then open the part of the menu you want to sort. Right click on any item in the part of the start menu you want to sort and select sort by name from the pop-up menu.
From a post by Peter Forrest:
On Wed, 25 Nov 1998 04:26:33 -0000, "Peter Forrest" <email@example.com> wrote:
:->You can make Windows sort alphabetically by removing the menu order
:->Open RegEdit and delete the following keys (i.e., left hand pane).
:->For start menu delete this registry key:
:->For favorites delete this key:
:->If the order changes in future, just delete these keys again.