Microsoft will say yes you need a new CD, but worst thing about it is that you won't be able to find an upgrade CD,, so you have to work around it

..... here is what you are going to do:
-Copy the Windows 98SE cabinet file in a folder called "win98SE" on your hard drive.
Please right down your original windows 98 product key on a piece of paper (do you know where they are ?)
then you can restart your computer, go in to Dos prompt, and delete the file called "win.com" , this is a hidden file and at the prompt first type in attrib -s -h -r and then delete it from Windows Directory, now you can reinstall the Windows 98se, go to the "Win98SE" folder and type in setup

,, two important note"
Do not start the installation if you don't have the product Key, and second, during installation, setup will try to install the operating system in new directory called c:\windows.000 , you MUST change that to c:\Windows (or original place where windows was install) in order to keep all the program file in your computer intact.
cheers