Windows (all versions) must *boot* from a primary partition on the first
physical disk. Your best bet is to get and use Partition Magic to manage
this process. Install Windows 98 first on the first physical disk, get it up
and running, run all the updates and install Partition Magic. Running PM
from within Win 98, create a bootable partition after your Win 98 primary
partition (be sure to READ ALL THE PM DOCUMENTATION), making sure that the
size of the FAT32 primary partition at the start of the hard disk (i.e. the
Win 98 partition) is just less than 8,192 MB, which is 8 GB. Make this
second primary partition NTFS from within PM. Now set the second primary
partition active, hiding the first, and boot from the Win XP CD. Choose New
Installation (Advanced), click Next, and click Advanced Options. Enable the
check box beside the "I want to choose the install drive and partition
during Setup" and click OK.
Install Win XP on the first physical disk, right after your Win 98
partition. Run all the critical and recommended upgrades. Then install PM on
Win XP. Set the FAT32 partition active and reboot. Back in Win 98, run PM,
and install Boot Magic within Win 98. Do not install Boot Magic within Win
XP. Use Boot Magic to choose which operating system you pick at Startup.
Use the second physical disk exclusively to store data, or to install
games, as you wish. Do not boot from or install an operating system to any
but the first physical disk. That ought to give you a stable and
well-performing dual-boot system with Win 98 and XP.