Active Directory

We were running windows server 2003. We recently bought another windows server 2003 with R2.
Now my problem is i cannot join in domain to become the child for the existing domain.
The article says that i need to modify the old server for R2.
Our issue is what is the impact if we upgrade old server with R2.
We are running 98 and Me computers in the network. Am i going to have any problems to connect the server if i upgrade to R2.
please help me out.
Suresh