I generally update with each nightly, too, on Win98. I download the
"mozilla-win32-installer.exe" and rename it to something like
"mozilla-012720-installer.exe" (for the nightly build of 1/27, for
example). This way I can keep a few nightlies on hand, in case one
breaks something that used to work.
Your profile stuff is generally kept in your
"c:\windows\application data\mozilla\users50\" while the executable code
is kept in "c:\program files\mozilla\seamonkey\" or whatever directory.
The first thing that the installer does is to delete all of the
contents of the latter directory (with your permission, of course) and
install all of the latest build contained within the installer file.
I've found that this keeps all of my profile information intact while
updating the build level of Mozilla. In fact, it does "too good" of a
cleanup job. Since I use a skin which isn't one of the default skins
supplied in the builds, I have to copy the "skins" folder, the
"all-skins.rdf" file, and the "gray_modern-03.jar" file which I have
saved back into the "chrome" folder inside the directory of mozilla
executables, before Mozilla will run.
Recently, I've noticed that the new nightly builds store the executable
code into "c:\program files\mozilla.org\mozilla\" which is a new
directory rather than the old "seamonkey" one.
This seems to work fine for me on Windows 98. Of course, YMMV.