I also run apache on windows 98. It's pretty easy to set up per-directory access control, once you know how. You can just run the bin\htpasswd command, like this:

E:\Program Files\Apache\bin>htpasswd -c ..\conf\test.txt joe
Automatically using MD5 format on Windows.
New password: ***
Re-type new password: ***
Adding password for user joe

E:\Program Files\Apache\bin>more ..\conf\test.txt

joe:$apr1$wv5.....$FOCsTs66yrYW/dOooo2E9.

E:\Program Files\Apache\bin>
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(If you run it with no args it will give you a usage message.) After running it, I can add these lines to my httpd.conf to protect my c:\cgi-bin and c:\mp3 dirs:

# password protect C:\cgi-bin and all subdirectories
#
<Directory "C:\cgi-bin">
# other restricted directories can share this name
  AuthName "go away"

# either Basic or Digest is supposed to work - only Basic seems to
  AuthType Basic

# User/Password file
  AuthUserFile "E:\Program Files\Apache\conf\test.txt"

# Only users in user file can access this dir
  Require valid-user
</Directory>

# same AuthName for C:\mp3
#
<Directory "C:\mp3">
  AuthName "go away"
  AuthType Basic
  AuthUserFile "E:\Program Files\Apache\conf\test.txt"
  Require valid-user
</Directory>
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The only thing I'm not sure of is whether IndigoPerl's bundled apache includes support for this. I'd say if the htpasswd.exe program is there then it does. I know thier apache is pretty minimal: I started out a few years ago using the apache that was bundled with IndigoPerl but ditched it and installed a normal apache when I couldn't get java servlets to work with IndigoPerl's.