Hi,
You do not need the full version to install. In point of fact, you don't need to format the disk first, either. W2K Pro Upgrade setup will allow you to delete / create partitions, format partitions, etc. If your BIOS has the provision, you can set the system to boot from your CD/DVD drive with the W2K Pro Upgrade disc in place. That way you won't need to use the startup diskette set.
Don't be tempted to install W2K over Win98 (or anything else for that matter). Clean installs work best. As long as all of your hardware is on the hardware compatibility list, you should be golden. Good luck!
Regards,
Jim