The default on most Sky routers is Automatic, with Open and Shared available in the drop-down. This may be one of the fixes available in the updated firmware.

Although Win 98/ME do not support WPA natively, it is still possible to use it with a 3rd party application. There used to be a few of these available but the only one I know of now is the McAffee one, available from here -
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This is a page translated from German, download and run the

It may also be necessary to download and install this MS hotfix

With regards the printer, reset it to factory default and set it up to use the new router.

This should also run on pre Sp1 XP.