IE4 Was the version of browser that got Microsoft in trouble. It started the notion of an "Active Desktop". IE4 was the first browser that could be represented as a COM Object (and could thus be used on your desktop window, in any sort of application, etc, as long as you called an instantiation of it). IE4 was packaged with Windows 98 (for whatever reason), and thus gained a large dominance, due to its tight integration with Windows. (Something that Netscape could do, if they really wanted to).
The Good Thing behind IE4 was that you could choose to have it pre-loaded. What happened there was that IE would take only a few seconds to load, because its major components were already in memory. It just had to draw the window, instantiate the IE COM object in itself, and then boom, it was ready to use in a second or so. Netscape could have done the same thing, if they really tried. They would just have to implement the IE COM interfaces, and all would be good. As an object, IE is truly an OS service available to all applications.
Look at the IE4 (codenamed Trident) executable: It should be like only a few K. You think that it's because they did a LOT of compression on it? No, not at all: iexplore.exe is really just a stub exe for the COM calls.
At the time, IE4 was a huge competitor to Netscape Communicator 4.x. IE3 (which shipped with earlier versions of 98, and later versions of 95) was pitiful, and looked more like its Mosaic roots. Go to Help, about IE, and you will see that it mentions the NCSA at UIUC for the work they did on Mosiac, and that IE is based on it.
IE4 introduced widespread dynamic HTML, which Netscape did not truly support at the time. Although IE's object model does in fact differ from Netscape's, a few simple hacks and code that you write can be run in either. IE4 also allowed code writers to write items with VBScript (and JScript), using updated engines provided from MS.
All in all, IE4 was a killer browser, especially in active desktop mode. It was far surpassed by IE 5.0, however, it did reign for several years. The concept of Internet Channels died somewhere in the marketing, and that never really made it to fruition (the technology saw some sucess in newer versions of the Pocket PC, with more mobility features).
IE4 (and subsequently IE 5.0) also marked the first difference in engine for the Mac version from the PC version. You can tell this difference, as the Mac version has a few different object model quirks not present in the Windows executable.