Make sure that both computer are configured to use the same workgroup. You'll need to make sure that both computer use the same Subnet Mask and make sure the Default gateway of the Win 98 system is configured to IP of the XP system.
To add printer, CONTROL PANEL > PRINTERS & HARDWARE > ADD PRINTER and choose NETWORK PRINTER then set it up. It will tell you to install the drivers.
Also have you tried running Network Connection Wizard on the 98 comp?