I always get those gay screens on 98 or Me. Might it be that i install Directx8.1?

You must have installed something incorrectly. Whatever was the last thing that you installed before you got these problems is probably the culprit. Boot into Safe Mode and work from there, uninstall the program if you can't figure it out, reinstall Windows over top of your existing install.

If it's a VxD error, it might have to do with bad RAM or an overheating CPU.

VxD errors tend to center around driver issues. Usually, there are two sure-fire ways of getting them:

1. Start installing something, and then watch Windows act stupid and ask for a CD when you and it both know DAMN well it wasn't bright enough to load a CD driver. Then, it wants to (or flat out forces a) reboot. Or...

2. Perform some sort of driver or even run Windows update, and it will load a wonderfully new and spiffy driver that instead crashes miserably with the old one.

Best way to get rid of them is to write down the driver name and any memory address info that you are presented with, and then go here and search for anything pertaining to those errors. Almost every one that I have had has been found here, and they usually have a simple, straightforward resolution.