Right then, I'm up and running. Was a bit miffed at Asus boards and part of me wanted to get some other brand, but in the end I just swapped the faulty one to my old Asus P5K I had lying around. The coil whine it suffers from hasn't disappeared anywhere, but thankfully it's very much in the not too annoying end of spectrum as far coil whine goes. But if it gets any worse I'll grind the board into dust.
But looks like it's working great and all the work I did with the previous board wasn't in vain, had to install Win98SE exactly the same way to get everything working. I did try different things in hopes of getting legacy USB support to work with USB2 with this board but no go. At least its JMicron IDE works fine, either the Marvell IDE of the previous board wasn't playing nice with WinXP or that was just another symptom of a failing board.
The way I need to install Win98SE with P35 board is pretty much this:
Details
1. Copy win98 folder from the disc to SSD and run setup.exe /p i
2. Once the setup reboots the first time boot the system with a boot floppy and install R. Loews PATCHMEM and PTCHSATA
I couldn't get IDE drivers to play nice when SATA was in Compatible mode in BIOS, so I run it at Enhanced mode and use R. Loews patched SATA drivers since they mention in the readme "The PTCHSATA.EXE file Patches the Hard Disk Driver ESDI_506.PDR to properly support shared Interrupts and to disable Virtual Mode I/O not supported by many SATA Controllers" and on this board SATA is definitely sharing IRQ with other stuff. So I suppose using it is probably helpful.
3. Once PATCHMEM and PTCHSATA are installed turn off Legacy USB Support in BIOS if it isn't already
4. Continue Win98SE install till it's done
5. Install nusb36e and reboot (earlier versions will not work)
6. Press cancel when Windows finds my modern HID USB mouse and wants to install drivers for it (otherwise it freezes instantly for whatever reason)
7. Make your way to Add New Hardware with a PS/2 keyboard and install the mouse drivers there (this board only has one PS/2 port and it's not a combined keyboard/mouse port, just keyboard)
8. Use the unofficial intel drivers mentioned in this thread to install drivers for PCI System Management Bus
That's it, the rest can be done normally.
Still leaves me without legacy USB support, but I don't need in on all the time. I have Win98SE and WinXP on separate SSD's and can just use the motherboards F8 boot menu when I want to boot WinXP, and when I want to TRIM the SSD's I just need to turn legacy USB support on for a moment. I've set up a boot menu for Win98SE so I can boot straight into DOS and run R. Loews TRIM there and for the SSD that has WinXP I can just boot with System Rescue CD and run FSTRIM.
E8600 was sure enough recognized as Pentium III first but after Office XP updated some core files it started to get recognized correctly as E8600. Not sure is that a good thing or bad, or completely irrelevant. Just a little concerned after noticing WinME had an update that fixed some Direct3D games not being able to recognize Pentium 4. Time will tell I suppose.
In the end it did need some elbow grease, but looks like it was worth it. Had I know PCIe Windows 98SE was this viable option I would have done this ages ago, but better late than never. Sheesh I came this close building a separate system for late Win9x games never realizing I already had one.