If the Internal Modem in question is a PCI based modem card, this is rather a common problem with PCI based modem cards in Windows 9x systems due to poor IRQ/BUS management of Windows.

Whether an obvious IRQ conflict is listed in Device Manager or not, when a PCI based card does't see/accept the proper device drivers, it would be logical to relocate the card to another available slot.

After you remove the card from Device Manager, shutdown Windows and unplug the PSU, then open the side panel, touch the PSU to release static electricity (use both hands if you have a habbit of dragging your feet..lol).
Then carefully remove the modem card from its current slot and place it at another free slot. It is best not to use the middle PCI slot (if you have 5 of them) or the one right next to the AGP port (if it exists and also is used).

See if that helps...if not Gizmo has a big hammer that he could lend you...

~TL