So I've been dissassembling Windows 98 all today (doing research for an upcoming blog entry), and I just found evidence of something very surprising: Windows 9x spawns new processes (with CreateProcess) by forking! That's really surprising, if it's correct. I'm definitely going to investigate this, more.
Been dissassembling Windows 98 (one particular part of it) for like 16 hours now, on some 4 hours of sleep. But I finally got the answer I'd been searching for. Anyway, it does not appear that Windows 98 spawns processes by forking (I'd initially thought so because you could trace a function call path in the dissassembly from CreateProcess to the code that gets executed early in the new process, but it appears that the latter is just a multipurpose function).