Re-Installing Win-98

Hi.
I have win-98 on my c-drive. It has 1.97 GB and 27 MB free space. I have deleted all I know to get extra space. It is formatted as fat 16 and it wont convert to fat 32? I have formatted 2 logical drives with 2 GB with fat 16 as default.
MY QUESTION:
1) I cannot re-install win-98, cause it says I dont have enough extra space available.
2) I booted up straight to the cd and I also tried from MS-DOS
3)I have deleted most extra files. What else can I delete?
4)Any suggestions would be appreciated and hopefully helpful.

Thanks, Pat