you need at least 3 partitions:
FAT32 partition for win98
Linux Native partition for Linux
Linux Swap partition for Linux
You can create the FAT32 partition first, and leave the rest of the HD unpartitioned... after you finish installing win98, go into Linux setup and u should be able to create the Linux partitions using fdisk or ddruid in Linux setup...
Linux should detect your win98 OS and lets you dual-boot...