I would not do this given the Windows 98 (dos) 127GB limitations and the sata CD issue might be worked around with a SATA to IDE apapter or BIOS emulation.
Frankly it's a small nightmare for most.
Links about this.
The dos/win98 wipes out due to the drive being over 127GB. I haven't see anyone truly succeed with that. But let me note that you can hook up the IDE CDROM just like the days of old to copy in the Win98 subdirectory to the hard disk and then install it from there. No CD support needed.
Got a real puzzler here.
I just replaced my mobo & assorted components, as follows:
Had: Asus A7M266, Athlon XP 1700+, 40gb WD IDE HD
Now: Gigabyte GA-P35-DS3L, Core 2 Duo E6750, 160GB WD SATA HD
Carried over: JLMS XJ-HD166S DVD-ROM
I did a clean install of XP Pro on a 60gb NTFS partition on the new HD, and now want to install Win98 on a 10gb FAT32 partition (see a summary of the process at bootstrike.com/WinXP/dualboot98.html). I created the partition, and made a Win98 boot floppy from bootdisk.com. The disk works fine, the FAT32 partition is accessible. Problem is, the boot disk can't find the CD-ROM drive. To be clear, the drive itself works fine - it shows up in bios, and I can even burn a boot CD from the floppy image and boot from it, but when I try to start with CD-ROM support, it can't find the drive.
I downloaded the 5 driver files (cd1.sys - cd5.sys) from bootdisk.com and tried them all. I even picked up a Sony CDU5225 CD-ROM drive (in case for some reason the problem was that it was a DVD drive), and tried all 5 driver files with it -- no luck.
Here is my latest thought -- in bios, the IDE CD-ROM drive shows up on IDE channel 4. The SATA HD shows up on Channel 0. 1-3 appear to be reserved for other SATA drives. Is it possible that the DOS mode CD-ROM drivers can't see the drive because it isn't on channel 0 or 1? This first occurred to me after I noticed that one of the 5 driver files says "four channels supported" when it attempts to load. If the drivers can only 'see' the primary & secondary IDE channels, perhaps that explains why they can't find the drive.
If this is possible, is it also possible that putting in a SATA CD-ROM drive might work? That will be the next thing I try, and the only thing left that I can think of.