As the other post noted, you need to SHARE the printer.
In windows 98 if sharing is not offered when you right-click the printer in the printers folder, you need to enable print sharing.
Control Panel -> Network then click file and print sharing and check the box required then OK.
After a reboot, share the printer.
Next, this is my standard routine when the two computers are not the same OS, install the printer directly to the laptop, since you will need XP drivers installed instead of 98 drivers.
Then reconnect the printer to the 98 machine, and then try doing the network install. This way the XP box has the drivers installed already. You can then remove the local printer, just don't let it delete the files if it asks.
This may or may not work, since there are usually monitoring software that are trying to connect at boot.
If you have too may problems you can always remove the software or disable the monitor software in MSCONFIG.