There's no need for a file server to be a domain controller. In the most general sense, a domain controller centralizes logons / authentication for your network so you don't have to worry about setting up user accounts / share permissions for all of your computers. It's pretty silly to have a domain controller on a 2-3 computer network unless you really want to learn something. Oh, and AFAIK, there is no way to make 98se a "domain controller."
~bex0rs