Why is my new keyboard incompatible with my PC?

Some of our keyboard keys have become intermittent (its like typing
with boxing gloves on). Easily solved though....or that's what I
thought. I simply bought a replacement (PS2 standard 102 key qwerty).

However, when installed, it produces a boot up error 'Keyboard error
Press F1 to continue', accompanied by numerous beeps and flashing of
the Lock indicators.
It is tempting to blame a faulty port, but it is working fine with the
troublesome keyboard. I have double checked the new keyboard on
another PC. The only logical conclusion is that it is a compatibility
problem. How can this be I plead?

I have been unable to find a solution, and appeal for help. I've found
nothing to help resolve on the web, although plenty of references to
similar problems. I have had to revert to the faulty one.
- The PC is 1100Hz AMD on Gigabyte motherboard, running Win98SE.
- It is connected on the PS/2 keyboard port.
- I have checked the BIOS.
- I have reloaded the keyboard driver.