Usually people make separate partitions for each OS, but it's not necessary as long as they're FAT32 partitions. (Win98 can't read NTFS partitions)
Install Win98 first, then install XP and XP will take care of making the proper modifications to the boot sector to allow you to choose the OS at boot.
Moving the drive to another computer may or may not work. Chances are you'll run into a few issues... first, the HAL may not be correct in which case you'll have to use the recovery console to install the correct one. Second, you'll be uninstalling drivers and reinstalling new drivers for the correct hardware... this can get painful if your motherboards are drastically different, for example an Intel chipset in one, and a nVidia chipset in the other. You'll spend more time correcting those issues than if you just install the OS on the hardware it will be used on.