This sounds a bit like your Palace server looking for the palace directory. This happens every 15 minutes, you can see in your Palace server log when this happens and if it is succesfull.
The people on your Palace have all the media downloaded without a problem?
Uni posted a good solution for DSL sever problems here:
http://www.palaceplanet.net/index.ph...topic&t=47
It is a good idea to put media on a website and serve it from there (see forum post on server media from website
http://www.palaceplanet.net/index.ph...t=4&sid=94)
And check the following: do you have a virus scanner running in the background? This can cause some weird issues with Palace.
And just to really depress you: Windows 98 and the personal Palace server are both pretty unreliable as far as I know you will never run a good stable Palace with more then 8 people on this configuration. I know many who have tried and failed, so might not want to spend to much time trying to fix something that will stay broke.
Good luck hope this helps you out.