I think it would be easiest to reinstall XP after partitioning and after loading W98. First job is to back up all data and internet settings etc., not forgetting the drivers for your peripherals.
Then partition the disk, and I would suggest 3 partitions, W98, XP, and a Data partition, that way you will be able to see the data from either OS. W98 must go on first, and then XP, and when XP asks if you want to update, choose no, and the advanced button, then specify which partition you wish to use.
XP will then act as a bootloader for both OS, giving you a menu on bootup to choose from.