I don't fully understand what you mean with 'de-bugging'. For me, it means 'finding errors in programs you're programming'.
Anyway, fntldr.exe is malware. Good you removed it. But there still is a reference somewere that says it should be run at startup. So run msconfig (from start/run), go to the startup-tab and uncheck fntldr.exe.
Then read this post of Bob Proffitt and run all 5 tools, to clean your machine still better: http://reviews.cnet.com/5208-6618-0.html?forumID=6&threadID=15518&messageID=174051
To answer your second question: it makes sense to download the critical security updates from windowsupdate. Be aware, however, that IE6 sometimes gives problems with Windows 98, but you can always go back to a previous version of IE, so I should try that also.
And, as you've noticed by now, these updates are only a part of the necessary security!
And a final tip: if you delete files, leave them in the recycle bin. Then ftnldr.exe should still be there, and you could have restored it from there. In this case, not such a very good idea, but generally an absolutely necessary precaution.
Hope this helps,
Kees
hi i have a win 98se 533mgz 64ram and during a de-bugging i believe i deleted something because after i reboot..i receive this message...cannot find the file "fntldr.exe"...and then it says could not load or run fntldr.exe in the win.ini.file....it still allows me to boot up but i wanted to know how this will hinder me and how to possibly correct the problem
secondly,is it necessary to always go to window update and download the updates?...t/y

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic