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A Windows 98 boot disk won't do you any good if your XP drive is formatted in NTFS.
The easiest way to reformat/reinstall XP is to boot with the XP CD in the CD drive.
If it ignores the CD, boot again and watch for a screen that says "Press X to enter setup" (where "X" is a key on the keyboard). Press the indicated key to get into the BIOS (also called setup). If you don't see a screen like that, the usual keys to get into the BIOS are Del, F1, F10.
Once in the BIOS, look for something to do with the boot order. Every brand of BIOS is different so I can't give you exact instructions. Once you find the boot order, move the CD drive up to first place.
The exit saving changes and let it proceed with the bootup. It will boot to the CD. Just read each screen carefully and make the appropriate choices to install Windows.
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