I would sugest that if it is an old dos program (like most progs that I remeber were able to format 1.72MB disks were), try using a dos/win95/win98 boot disk (
http://www.bootdisk.com ).
An alternative is that if you can somehow put the laptop on a network (and the hd is large enough), dump all of the win95 install files onto the laptop, delete everything else and run the install from the laptop (added benefit that if you need the 95 install files, it's already on the laptop.