Can you debug a Windows Service? How ?

Yes we can debug a Windows Service by attaching the WinDbg debugger to a service after the service starts.
This method is similar to the method that you can use to attach a debugger to a process and then debug a process.
Use the process ID of the process that hosts the service that you want to debug

How can a win service developed in .NET be installed or used in Win98?

Windows service cannot be installed on Win9x machines even though the .NET framework can be run and installed on win9x machine

What is a Windows Service and how does its lifecycle differ from a "standard" EXE?

Windows service is a application that runs in the background. It is equivalent to a NT service. The executable created is not a Windows application, and hence you can't just click and run it .
It needs to be installed as a service, VB.Net has a facility where we can add an installer to our program and then use a utility to install the service.
Where as this is not the case with standard exe

What is SCM, What does it do?

SCM is Windows Service Control Manager. Its responsibilities are as follows:

Accepts requests to install and uninstall Windows services from the Windows service database.
To start Windows services either on system startup or requested by the user.
To enumerate installed Windows services.
To maintain status information for currently running Windows services.

Give one basic difference between windows service and windows forms application?

A Windows service typically does not have a user interface.