While Windows 2000 should still be supported, the effect is the same

It is possible I suppose to rewrite the driver for 98 and truely support multiple mice, but I have no plans of doing so at the moment as this route works fine.
Guncon2's are NOT act lab lightguns - I have no trouble telling which gun is which (this issue has came up before, will add it to the FAQ sometime). You can assign the trigger on any gun to any keyboard or mouse button you like. So the basic effect on XP supporting only one mouse is this: only one gun at a time can "track" on the screen, and if you are using drag mode you cannot double assign buttons and expect it to work (in other words, you can't assign gun #1 and gun #2's trigger to mouse1, press both at the same time, and expect two clicks in drag mode. You can't press a mouse button again before you release it). With single mode, even if both users press at the exact same time and the triggers on both guns are assigned to the same button both shots will be fired.
I am not sure exactly how Guncon2Mouse handles all the different issues that arise with having two guns on one mouse, I've not tested like that yet.