i am almost positive you do not need win98SE, win98 first edition should be fine. i don't think i have ever heard that win98SE has a limit of 2GB.....hmm let me check this.
okay i checked. you have 2GB because you are using FAT16. win98FE and SE startup disketees have FAT32 support. from microsoft. pay attention to the note message. that note also applies to FAT32 with winXP, meaning max is 32GB also using winXP:
FAT32 provides the following enhancements over previous implementations of the FAT file system:
1) FAT32 supports drives up to 2 terabytes in size.
NOTE: Microsoft Windows 2000 only supports FAT32 partitions up to a size of 32 GB.
2) FAT32 uses space more efficiently. FAT32 uses smaller clusters (that is, 4-KB clusters for drives up to 8 GB in size), resulting in 10 to 15 percent more efficient use of disk space relative to large FAT or FAT16 drives.
3) FAT32 is more robust. FAT32 can relocate the root folder and use the backup copy of the file allocation table instead of the default copy. In addition, the boot record on FAT32 drives is expanded to include a backup copy of critical data structures. Therefore, FAT32 drives are less susceptible to a single point of failure than existing FAT16 drives.
4) FAT32 is more flexible. The root folder on a FAT32 drive is an ordinary cluster chain, so it can be located anywhere on the drive. The previous limitations on the number of root folder entries no longer exist. In addition, file allocation table mirroring can be disabled, allowing a copy of the file allocation table other than the first one to be active. These features allow for dynamic resizing of FAT32 partitions. Note, however, that although the FAT32 design allows for this capability, it will not be implemented by Microsoft in the initial release.