Have you put your hook proc into a DLL? As far as I remember, you have to do that to make it work.
as far as i remember you can create hooks without dll's but this hook type must be a system wide record hook. some time ago i just played with hooks too and i wrote progs that use different hook types - i tested them under win98 & 98 and it worked fine so maybe you have to do some error checking. if you want you can send me the hook-procedure so i can take a look... bye.