Looking at the topic and then what you are trying to do, I'll ask you why are you trying to put Win2k on your C drive if your Win98 install is there?
IMO, since I've done this, the safest way (and easiest) is to put Win2k on a different partition. I too have Partition Magic and I carved out a partition just for Win2k and made it a NTFS partition. I'm duel booting and everything plays nicely....well, it was until I installed something and Win2k doesn't auto shut down, but that's another story.....
I'll be out until late Sunday or Monday, but LMK if you need more help....