This is due to Microsoft's insistence that you can't install an older operating system, than the existing. So '98 will find ME and say No!
In an ideal world, you would install '98 first, then install Boot Magic and make a recovery disk.
Then install ME to a different drive or partition. This would overwrite the boot files of '98, BUT, you can then use the recovery disk to reinstall the Boot Magic files, so you can get back into '98.
Having done that, you then add ME to the boot options in Boot Magic and that's it; job done!
Now. There may be a way around this, if you proceed as follows.
Disconnect your existing C: drive. Install the "new" drive and make sure it is set as Master. It also needs to be set as active. Install '98 to that drive and once complete, install Boot Magic and make the recovery disc as explained above.
Now either connect your ME drive to a separate channel as Master, or as Slave to the '98 drive. (Make sure it is jumpered correctly). Boot into '98 and add ME to Boot Magic and you should be in business.