I think you have yourself a little confused here.
Win98 reads FAT16, FAT32
WinNT reads FAT16, NTFS
Win2K reads FAT16, FAT32, NTFS
If you wish to dual boot Win98 with WinNT, you must have C: as FAT16 (the only common file system they have).
If you wish to dual boot Win98 with Win2K, you can use either FAT16 or FAT32.
If you have an NTFS partition, Win98 will not be able to access it without 3rd party drivers.
In terms of converting partitions, you can convert FAT16 to FAT32, FAT16 to NTFS, or FAT32 to NTFS. Windows' own native tools do not support any other direction of conversion. Again, you will need 3rd party tools to go in another direction.
I hope that helps.