Jen-
In a timely read of this months (Dec 2002) issue of MaximumPC they say "... only Microsoft Windows XP and 2000 have official support." for 48-bit addressing for hard drives larger than 137GB. So, it seems that even though your motherboard supports and recognizes the drive, Windows 9x/ME won't recognize the full capacity. The small article only mentions using an add-in PCI IDE controller card for fixing the issue of an older motherboard not supporting larger hard drives.
Hopefully, someone else knows of a way to get Windows 98 to recognize the full capacity of the drive...
On another note, from experience, I have found that many of the older apps I have tested/tried seem to work very well with Windows XP (even some old DOS games). Windows XP does a fairly good job with its "compatibility modes" (you can install a program and have Windows XP run it using DOS, Windows 95, 95, ME or 2000 style with registry entries/file locations to match older Windows OSes). Though, perhaps if you are using specialized apps for Windows 98 they may not work or work more slowly... Maybe if you let me know a couple of the apps you need to use I may have experience with the app and Windows XP and can let you know if they work?
Well, either way, good luck!! Let me know if I can be of any more help (assuming I helped at all 😉)
\Dan