You couldn't even go from Windows 98 to Win98 2nd Edition if I recall without buying a whole new product.

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I think there was a special edition of 98SE that was very cheap if you already had 98FE, about £20 or something, as well as a regular "Upgrade" edition of 98SE for owners of 3.1 and 95. There's always been Upgrade and Full editions of Windows (and Office for Windows), the upgrade ones being cheaper and allowing you to use the last few versions of Windows, the two together making one licence for the new version (ie you're not licensed to have the old version installed on a separate PC when you've got the new "upgrade" version installed). Vista upgrade, for instance, is a lot cheaper than the full version and can be combined with a copy of 2000 or XP to make a full Vista licence, while XP upgrade can be used with a copy of NT4/98/Me/2000.