Do NOT intall 98 over the XP, as was already mentioned it will ask, then proceed to reformat prior to intall, and you'll lose whatever you had.
The knoppix idea is good, but only if you're familiar and comfortable with Linux. If you are, or even comfortable with new things, go that route, it's a pretty slick recovery method that I had not thought of (thanks bal8664).
Other than that, shove another hard drive in there as Master and load an OS on that, then access the other drive ot get your data. I know you say you can't open your computer, but trust me, you can. There should be no way that hardware should be an obstacle. Find the screws, take them out, pry the cover open, whatever you have to do. Don't forget, some cases have locking mechanisms built in, so look for the easy way out before you start with the sledge hammer. In fact, don't use the sledge, bad idea.
Anyway, that's all I can add. Good luck.
Peace,
Pierre
ps. you did back up your data thought, right? Worse case scenario, you haven't lost very much right? Right! Everyone, backup your data!
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There is no such thing as strong coffee - only weak people.
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