Thanks for sharing your experience.
Apparently your problem was due to poor CD-RW media.
You may upgrade InCD to 3.52.00b from www.ahead.de
(I'm using it on my 98SE box). As for Nero, you may try 188.8.131.52a; in case of problems, you may step back to the earlier version 184.108.40.206b from ftp://ftp.nero.com/Nero55107b.exe
You should try enabling DMA for your burner; otherwise both reading and writing speeds of your burner will be severely limited.
In general, it's better to use full-erase rather than quick-erase.
You will find more information on InCD under Win98x in the guide http://www.cdrlabs.com/phpBB/viewtopic.php?t=9597