Networking a Win9x/ME machine to a Win2k machine with file and printer sharing works fine accessing the 9x machine from the win2k machine, however the other way around the win2k machine requests a password which is unknown to the user (for the resource IPC$).
Solution:

Getting an IPC$ password request when networking to a win2k machine?
This is W2K's way of asking 'are you allowed in here'; are you a 
member...? - a bit like the doorman/bouncer at an exclusive 
club... IPC$ = InterProcessControl...

You have to create a user account on the W2K machine and then log 
onto the WinME/9x machine with that userid and password. (If you did 
a default install with Win98, it probably has your whole name as the userid.)

1) On the 9x/ME machine do start/logoff - now see that username? 
Make that user account on the W2000 system by following steps 2-5.

2) On the win2k machine, right click on 'my computer' - than go to 
'manage' - after that go to 'Local Users and groups' and then 'users'. 
Then right click in window and select 'New user'.

3) In user name window type the name of computer that you would like to 
acess your shared folders, but use the login name of the WinME/9x 
machine. Enter the password used on the winME/9x machine (if any) here 
also.

4) Unselect - user must change password at next logon

5) Select - password never expires ..

6) Log back in on the winME/9x machine with the username and password 
you've set up on the win2k machine.

I hope that helps some of the less experienced users like me out there :-)