The problem is your path (use :set to check it if Hugs still works).
On windows, your path is stored in the registry and (due to a mistake
by me) silently stored into the registry when you change it - even if
your choice of path is completely broken.
Three fixes:
1) Invoke Hugs from the command line specifying an explicit path
to override the default.
hugs -P{Hugs}\lib
Once Hugs starts up, use :set -P to set your path back to some more useful
value. (You probably want some of the subdirectories of {Hugs}\lib too.)
This will write the new path into the registry.
This has the disadvantage of deleting your old path - which might
have had some good stuff in it.
2) Use regedit to edit the registry entry.
The entry in Hugs98-Nov1999 is somewhere near:
HKEY_LOCAL_MACHINE\\SOFTWARE\\Haskell\\Hugs\\" HUGS_VERSION "\\"
(Sorry, I'm not on a Windows box so I can't check exactly what it looks
like.)
More involved but if you don't remember your path, this might let you
salvage the good bits.
3) Use regedit to delete the registry entry.
Hugs will insert a good entry next time you run it.
No real advantage over (1).
Alastair