(to Roshi229 - you don't get STOP errors with win98!)
I'm repeating some of whats already been suggested but thought I would try to clarify it all for you :
My advice is b4 you do anything, remove any PCI cards from the system & unplug any external devices (external modem/router/hub, printer, scanner etc). Leave only the video card & drives. Trust me, you do NOT want USB devices connected either while installing windows.
If you have any onboard devices such as network card, sound card etc, you might want to disable them in the Bios.
Also, go into the Bios and DISABLE any Boot sector virus checking - most BIOS's have this and it can cause windows install to fail.
Perform the format & reinstall. You might want to use a normal copy of win98 instead of recovery disks especially if recovery disks install other software such as Symantec(Nortons) as well as windows.
If you still have BSOD errors, i would recommend you check your RAM using a utility such as memtest86 or pc-checkit etc. These are downloadable for free & load from a floppy disk.
You could also try restoring the BIOS settings back to defaults, although if you haven't messed with them, theres no reason why these should be a problem.
If windows installs OK this time, you can start re-enabling any disabled devices, then add any cards you removed back in. Finally, connect any external devices. BUT, do all of these ONE BY ONE, that way if one is causing a problem, you will know which one it is.