Elroy is correct. Here's an earlier post of mine...
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I'd wipe the HDD with an application like Killdisk. Writes zeros to the drive, essentially making it "like new".
Killdisk is a nice free program that is not hard drive brand-specific; it'll work on all hard drives.
You can go to bootdisk.com to D/L a win98 boot disk and then copy the Killdisk program to it. Then boot up to dos, navigate to the floppy drive (probally will be "B:\" drive), type in "killdisk.exe" and follow the instructions. When in dos, navigate to the B drive and type in dir/w. If killdisk is listed there, you're in the right place to type the "killdisk.exe".
I apologize if I'm going into too much detail, but if you don't work much with dos it can be a little confusing.
Links:
http://bootdisk.com/bootdisk.htm and click win98 OEM
http://killdisk.com/downloadfree.htm
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Also, I'd make sure your HDD is properly cabled, with the right jumper setting. After the HDD is wiped, doing a fresh install shoud be sucessful. Size and format only the "C" drive during the install (using the install CD), and the create the other drives using "Disk Management" after you are up-and-running. Good luck.