Windows (all versions) needs to boot from the first physical disk, and
from a primary partition that starts within the first 8 GB (8,192 MB) of
that first physical disk. In the case of what you are trying to do, I'd
suggest getting a copy of Partition Magic from
www.powerquest.com. This is a
very inexpensive application that is far, far superior to the crude and
blunt tools that ship with Windows, and allows you to add, delete and
re-size partitions without needing to essentially reformat the hard disk. Be
sure to make a full system backup any time you manage partitions for any
reason.
I'd put the Win 98 FAT32 primary partition at the *front* of the hard
disk, and ensure that it is just less than 8 GB in size, say 7,800 MB. Use
this primary partition to install Windows 98 and all its applications. Keep
your Win XP NTFS primary partition just after this FAT32 primary partition.
Use the newest and fastest hard disk to be your first physical disk (i.e.
the 'master'), and use any other as your second, or 'slave' physical disk.
On this physical disk, you can make as many logical partitions as you like.
Use this second physical disk just to store data and nothing else.
Obviously, any logical partition that needs to be read from *both* Win 98
and Win XP needs to be set up as a FAT32 partition, and not NTFS, as Win 98
cannot recognize an NTFS partition, bit Win XP can see, read and write to
FAT32 as well as NTFS partitions.