How do you think a game console works. The have a CPU and a motherboard and the games are programs that they run. Most have Harddrives see related link on PS3 Secrets to see the insides of the PS3...
Do you mean the games say "compatible with windows 98?" and you have Windows XP?
Games are backwards compatible. Meaning, if the games say "windows 98", windows 95 is ok (anything before windows...
Games purchased legally will not give you a virus. Unless you download a "patch" or update or content from a suspicious source. Games downloaded illegally may or may not give you a virus. Luck of the...