Windows

Then it is most likely a faulty Floppy drive. Even if these don't get used they can still fail because they end up sucking in a lot of dust and other crud. I would start off by changing the Floppy in the 98 Machine and if that doesn't work move the new Floppy drive from the 98 Machine to the XP machine and it should be able to read what it writes.

Col

Does the floppy still read on win98?, I have floppies that were created on 98 and will read on XP so check that the files are readable (open the floppy disk using my computer and right click the file, click on properties) down the bottom it will have some check points, "read", "hidden", & "archive". Make sure read is checked and that all others are unchecked. If you can't read it now look online for what you cannot get off you floppy, if it is a photo you can get free online disk recover utilities, always err on the side of caution in this respect.