<p>Up to now in my application, I've been supporting all flavors of Windows from Windows 98 to Windows NT/2000 to XP to Vista.</p>

<p>But because of adding Unicode in my next version, support of Windows 98 would still be possible, but very difficult.</p>

<p>I know there are still some of my users running Windows 98. </p>

<p>What are the pros and cons of me no longer supporting Windows 98?</p>

If you still have users running Windows 98, then one obvious drawback to dropping support is that some of those will inevitably refuse to upgrade. They'll either stick with the version of your software they already have, or switch to something else.
On the other hand, the cost of developing for and supporting those users probably outweighs the additional revenue gained from it. So even though in principle you don't want any unhappy customers, in practice it may be more cost-effective to keep 99% of them happy.