Hi,
Now that you have the file "tools-winPre2k-9.6.5.iso", you have parts needed to be able to install VMware Tools in your Windows 98 VM.
An .iso file is not an application (even while your windows says so) it is a CD rom image and VMware Player is able to open it directly.
This cdrom file contains the installation files for VMware Tools.
The thing to do is to point the virtual CD from your VM to it and "connect" and then run the setup from within your windows 98 VM.
If you need exact steps, tell me.
PS: Thanks Gimmely for the extra explanations and yes we are all volunteers down here trying to help out others who have a problem.
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Wil