On the 7th of March 2002, Microsoft released a Security Bulletin, about a vulnerability in the Windows Shell.
Microsoft advises users to install a patch. This applies to:
After you install this patch on a Windows 98 (or 98 Second Edition) system, you will notice that TTW will not allow you to change the shortcut icon anymore.
This problem doesn't only occur with TTW, but (as far as I know) with all programs who can change the shortcut icon (I know for sure that it affects Microsoft's own TweakUI).
Apparently Microsoft introduced a bug in Shell32.dll which leads to this behaviour. You can follow a discussion on our Windows support BBS about this issue.
As far as I know only Windows 98/98 SE are affected. I've tested Windows 2000, it doesn't suffer from this problem.
Microsoft has been made aware of this problem, and now it's up to them if they decide to fix it.
I'm sorry about the inconvenience but it is out of our control.