The easiest way to upgrade to IE 5 is to install it over IE 4.x. (Indeed, if you have Windows 98, you can't easily remove IE 4.x.) If you go directly from IE 4 to IE 5, your settings, Favorites, Address Book, Mailbox, and News folders will automatically carry over into the new browser.
In most cases, the new program simply uses the old data as is. The exception involves Outlook Express, where version 5 does not store messages in the same way as OE 4.x. If OE 4.x was installed when you upgraded, the first time you launch Outlook Express 5, the program will automatically import the OE 4.x mailbox. But when it does so, it will leave some junk behind. You can get rid of this debris.
Outlook Express 4.x stores messages in two subfolders called Mail and News, both residing by default inside C:\Windows\Application Data\Microsoft\Outlook Express. But Outlook Express 5 stores messages directly in that OE folder - without the subfolders.
You'll free up quite a few megabytes if you go to C:\Windows\Application Data\ Microsoft\Outlook Express and delete the Mail and News folders.