HDD partition probs

Hi
I partitioned my HDD in to two equal parts C, & D. Part C has been set active and formatted in to FAT32.
To do all the above I used a Win98 boot disk and the choice was to Start computer with CD-Rom support.
The problem now is when I type A:\> e: setup to start installing Win 2kPro in drive C from the CD-ROM , the reply says that This program can not run in DOS mode.

The other problem is when I try to format the other half Of the HDD (D) the reply says: Format not supported on drive D:
Any suggestions Please?
Thanks
Yiotie