Yes, "/I" means "use this directory when searching for include files".
The Half-Life SDK includes a .h file called "util.h". There is also a "util.h" in the MSVC standard includes. What's probably happening is that the MSVC version of util.h is being included instead of the Half-Life SDK one.
Why did you install the Half-Life SDK in "program files\microsoft visual studio\vc98\include" anyway?
I would recommend you remove it from there and install it someplace separate (perhaps in "D:\Half-Life SDK"), then change your /I include list to look something like this...
Code:
/I "D:\Half-Life SDK\sdk\multiplayer\common"
/I "D:\Half-Life SDK\sdk\multiplayer\engine"
/I "D:\Half-Life SDK\sdk\multiplayer\dlls"
/I "D:\Half-Life SDK\sdk\multiplayer\pm_shared"
/I "D:\program files\microsoft visual studio\vc98\include"
/D "WIN32" /D "NDEBUG" /D "_WINDOWS"...
botman