Remove all partition form the HDD

First Install windows 98 in C:. Create only C partition with the size you
want. Once the installation of 98 is over, use win xp cd to boot the system
and create another partition and install win XP in a newly created
partition. 
Create a  Fat32 for a partition so that you can put your data in that
partition which can be accessed from 98 and XP 

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