did safe mode in win 98 not boot?
actually dont worry about that as you now have xp so can you give some more info on your hardware please what sound card do you have or is it onboard sound? in which case what make of motherboard do you have? are your drivers up to date and is windows xp up to date? have you installed service pack 2 yet etc?
check device manager. click 'start/control panel/performance and maintenance/system/hardware/device manager' or 'start/control panel/system/hardware/device manager' is your soundcard or onboard chipset listed and does anything here have an exclamation mark beside it or a red x? if so your hardware is maybe not xp compatable or you need to install drivers maybe.
try this too: click 'start/run' type 'dxdiag' then click the 'general' tab. what version of direct x do you have? click the 'sound' and the 'music' tabs and run the 'tests' here is there any sound? is there any errors noted in the notes box?