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 -
Google Translate

This is a page translated from German, download and run the http://anon.downloads.wirelesssecuri...ee%20Setup.exe

It may also be necessary to download and install this MS hotfix http://download.microsoft.com/downlo.../243199us8.exe

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.