This ocurrs on few Windows 98 configurations. It does not happen on majority of Windows 98 setups. Since you are having this problem, you will have to extract a file named QEdit.dll from DirectX.cab (part of DirectX 9c runtime), copy it to the system folder and register it.
Here are the steps:
1. Locate the extracted setup of DirectX 9c runtime on your computer.
2. In the setup files, find the file named "DirectX.cab".
3. Open this file with an unzip utility like WinZip or WinRAR.
4. Find the file named QEdit.dll and extract it to a temporary folder.
5. Open Windows Explorer and browse to C:\Windows\System32 (or to the folder where you have installed Windows).
6. Find the file QEdit.dll in this folder and rename it to QEdit_Old.dll.
7. Copy the extracted QEdit.dll to this folder.
8. On the Start menu, click Run.
9. Type "regsvr32" (without quotes) and drag and drop the copied QEdit.dll to get its entire path.
10. Click OK.
11. You should get a message informing you that "regsvr32" succeeded.
You should now be able to use Video Edit Magic.