Why dont you just simply install winXP as a Seperate partition! and then once you have it running smoothly use the file transfer wizard and transfer all your junk and stuff
over to the XP account form the 98 account the Transfer wizard is found in winXP
C:\Documents and Settings\All Users\Start Menu\Programs\Accessories\System Tools
Or simply Start > Programs > Accessories > System Tools > File Transfer Wizard
This is probley the best way to do it like if winXP messes up then you just uninstall it and no harm is done to win98se