I always find a fresh install to be best. You can boot from the xp disk and just follow the instructions.
Alternatively if you insert the xp disk while running win98 it will give you the option to install over thetop of 98 with a fall back to 98 if you want to go back.
Make sureall installed applications are xp compatible.
You may need new drivers for some hardware eg. graphics etc. but xp has a reasonable driver library of it's own.