I'm running it in the correct compatibility mode and everything.
Why should it be in a compatability mode if your OS is the same as Fraps?
If your OS is Windows 95/98, running Fraps built for Win95/98 is no problem.
If your OS is WinXP, running Fraps built for Win95/98 is a problem even if NBA Live98 is running in compatibility mode.
The last time I checked Fraps only works with WinXP now. The last version suited for Win95/98 is Fraps 1.9d
I could send you the file if you're interested.