between Windows XP uptake and the Win98SE life cycle.
To be honest, whether or not a life cycle is extended makes little difference does it? The operating system will continue to work just as well, and by the end of the projected life cycle the majority of desktop users will be running a different operating system anyway.
What drives a new operating system in terms of uptake is its installation on all new computers sold. Unless you specify otherwise your new machine will automatically come with WindowsXP, and a new generation of computer users will know virtually nothing of Windows 98. I certainly haven't heard that the WindowsXP uptake has been slow - in fact I've heard exactly the opposite - but I'm talking to some fairly senior Microsoft people tomorrow, and I'll ask them.
If you are contemplating moving to Windows XP I can see no good reason to hesitate. It's incredibly stable, runs fast, has some very nice features, and the remote access facility has changed the way I work with clients who are too far away to make a quick visit a possibility.