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Without getting my grubby hands on one of your computers, I can only give you a theory. I suspect that your Windows 98 computers weren't using user profiles. Windows 2000 obviously maintains user profiles for each user. As a result, when Windows 2000 creates the user profile for a user, it's trying to configure Office 2000 for that user but unable to do so because the user doesn't have enough privileges. It works as an administrator, obviously. One option to fix this problem is for you to set the Install Always Elevated policy in group policy or system policy. You find this policy in the Office 2000 Resource Kit. I'm doubtful that this is going to work, however. I suspect that you're going to have to redeploy Office 2000 to each user or try to do a repair for each user, at the very least. Welcome to the world of Windows 2000 and restricted users.
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