One way of doing it is to make sure File and Print sharing is installed on the Win98SE machine - open Network Neighbourhood and add file and printer sharing from the list of available Services if it is not already installed. Restart your PC after installing it.
Create a folder on each computers hard drive and call it Share or something meaningful to you.
Right click on the folder and:
for Windows XP, select Sharing and security or click on Properties and select the Security tab. Follow the prompts to enable file sharing and give the folder the necessary access rights to allow users to create and delete files (or not as you wish).
for Windows 98SE select Sharing and again, select the options or fill in the username and password for access rights to allow and enable file sharing on that folder.
Now when you browse the network each machine should see the shared folder on the other and it will be listed on the network as \\Computername\share or something similar
If you have a printer on one machine you can share that as well using similar methods. Open up the Printers icon from your control panel and right click on your installed printer. Click on Sharing from the drop down menu and follow the prompts.
Hope this helps.