Poledit is the Systems Policy Editor for Windows 98 (and possibly other versions of Windows).
It's used for creating user policies for networks with Windows 98 clients. It's a fairly simple tool to use, but with enough power that you have to be careful about what you select before you implement the policy.
I recently used this tool in a network with a domain server running Windows 2000 Server, but with mostly Win98 clients.
If the network had only consisted of Win2K clients, implementing system policies would have been a piece of cake, because they can all be done right from the server. But Windows 98 is a bit tricky. We (the 'systems integration' team) had to run poledit on a Win98 machine, figure out the permissions and restrictions we wanted for the default computer, default user, and any individual groups and users, save the file as config.pol, and export it to the netlogon folder in Windows 2000 Server.
This was a longer process than if the machines were Win2k, but it was fairly simple.
A big problem with Win98 clients is that you can access the network by simply pressing the 'esc' key at the logon screen. By using poledit, we fixed this problem, thus ensuring that only users registered with the domain could log on.