I wouldn't say adaware is the best, or at least not the free to download version, (if it was the best then why would there be a sold professional version too?)...
I use Spybot search and destroy, This has features that will allow you to block known bad activex controlls on pages, it also comes with an app called tea timer that sits on the PC and monitors registry changes, so if some new vulnerability is found then it can warn you thatsomething is being installed on your PC.
You should also use a virus scanner, again a nice free firewall is AVG.
I use the windows firewall without trouble...
It's a bad idea not having any firewall at all, it's just asking for trouble...
You caould try using a program like outpost, (thats free and has a small foot print (uses very few resources)...
One thing I will say is that you should work with your firewall instead of trying to work around it...
You specifically mentioned that the AIM ports were blocked and the direct connection ports were blocked.
all you need to do is unblock these ports on the firewall... a quick google search
AOL messenger port - 5190
Direct connect ports - 375 - 425
Since you've been running your PC's without a firewall you should also consider using a profile such as hijack this to scan for other nasties that spyware programs don't pick up. (if it's possible I'd even go as far as to format a system and start again if it's been connected to the internet without a firewall).
There is no reason that windows 98 should be working better than XP, infact it should be the other way around...