Check the cables. Make sure the disc itself is OK, test it in other computer. Then see if you can open it in My Computer. Then reboot from XP disc, select partition to install (the 98 partition I presume), continue until it asks to format it, choose FAT32 format (not the quick one). If the partition is larger than 10GB you can also use NTFS, but FAT32 is faster on smaller volumes.
TheMajorMMX - Intel P200 MMX @ 225Mhz - V-Tech (PcPartner) Baby-AT mb w/ Intel Triton TX chipset - Nvidia Riva TNT2 M64 w/ 16MB - 256MB M-Tec SDRAM - Still running.....