Before doing this i have downloaded a copy of the windows 98 boot desk and then copied it onto floppy. Before actually taking out my old hard drive i restarted my computer with the floppy and operating system disk in, the prompt a: comes up, when i type in d: i get the message drive not recognised
Are you booting with the smaller drive in the computer or removed ? I would suggest that it is removed since the boot disk is likely to try and boot from it. I downloaded a boot disk to install 98 and they were hopeless, they just didn't seem to do anything.
Just thought of this. Try restarting in MS-DOS Mode, from there see if you can access the CD.