Another option
Reboot ur system with a bootable xp cd
1. go to dos prompt(boot from dos prompt option)
2. run fdisk.exe command and delete primary partition, extended dos partition, logical partions, to know if you have deleted all partitions select the display partion in that menu.
once done. restart your system
again you have to run fdisk.exe to create new partitions for c drive and d drive including giving the space for both of this drives.
After this again reboot your system and from dos prompt format c: & d: respecitevely.
Ur all set to load win xp in c drive and 98 in d drive.
reach me incase you any more questions