Which are you trying to upgrade? Windows 2000 to Windows XP, or Windows XP to 2000? Windows 2000 to XP is a valid upgrade path. Windows XP to 2000 is not. Instead of reloading 98, you could do a clean install of the upgrade. Set your PC to boot from CD. Put the upgrade CP in your drive, boot and start the install. At some point the installer will ask for a "qualified product". Put your Windows 98 CD in the CD drive and have the installer look for it. Follow the remainder of the instructions, and you should be set with your new OS.
\Dan