What you could try doing, to help pinpoint what is making the graphics slow, is to install 1964, copy RSP.DLL and Jabo_Direct3D6.DLL from the PJ64 plugins folder (and any other gfx plugins you want to test) to the 1964 plugins folder and try playing some games in 1964.
The setup is almost identical to PJ64. One tip, once you've changed the gfx plugin (from Plugins -> Change Plugins) in 1964 you might have to restart 1964 to change the settings. Also go to Plugins -> Change Plugins and then tick Use RSP Plugin.
If it works fine then maybe something in PJ64 doesn't like your PC, if it doesn't then we know it's the plugin that your PC doesn't like.
When PJ64 didn't work i just couldn't use it in XP and left it. Later on i dumped 98 totally and when 1.5 came out i tried again and it worked
One last thing, do normal games work fine, and in dxdiag did it say all Acceleration types were 'Enabled'? They should be.
Oh and is every game slow in PJ64?