Install Xp, use PQ magic to dual boot. It will instruct you on what to do next to install 98 for dual boot. PQ magic works great for me, I don't try and second guess it.
Shoulin made a comment about XP understanding older software, I agree. It is older hardware XP doesn't like, and some older apps granted.
Also, don't install OS' on different drives as you did. Boot sectors come into play and you don't want your Operating Systems spread out all over your drives.
Define c: as the drive for your OS', and partition the rest of your drive(s) as you wish, data, games, video, etc..., but don't try to put 98 on c:, and XP on h:.
As you have seen, it doesn't work.
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