Not all that familiar with 98, but I would suggest backing up all of your HD data (regardless of what method you use) and reformat the HD and install XP on it, THEN install 98 as a secondary OS (you can change the default boot order in XP for what OS is default regardless of which one is on which partition). I would rather have XP handling the multi-OS boot than 98 (Esp when dealing with an NTFS system, if you go that route). Question: Why stick with 98? XP is usually just fine, esp if you use msconfig to get rid of stuff you dont need as services. I know a lot of BYOACers here swear by 98, but I have yet to see if it is in fact better than XP for MAME purposes...
EDIT: Missed the question you asked about how to go about it: In XP (maybe 98 as well?), after you have installed the extra OS, run MSconfig and select Boot in the tabs, it will give you a list of OS's and options regarding booting. Try it in 98, just go to run and type msconfig in and hit enter. There "should" be an option called "boot" in a tab there.