Image of an OS on a partition…

Hi all,
is it possible to do a partition on my Hard Drive, and make an image of my OS Win 98 SE CD ROM, so that, when the system asks me to insert the Windows CD ROM, during an installation, I can just instruct it to get the file it needs, from that partitionn?

For Ex.:

Primary partition C:/ Windows OS
Second partition D:/ data
Third partition E:/ image of WindowsOS CD RoM

Would any problems arise ?
Could I eventually do the same with a program, like Office, which keeps prompting me for uninstalled components?

I know I could try, but installing is a pain, boring process, and I would prefer to know in advance of any possible problems.

May be you’ve tried it before, and know if there is anything I should be aware of.

I hope you can help

Kind regards, Seth