If you have a CD-ROM Drive cleaner try using it on the CD-ROM drive in question.
Do you have a Windows 98 Resource Kit Manual ? If you do check pages 171 and 201 through 204 for Windows98 Setup Error Messages that occur and are written automatically into Bootlog.txt. Bootlog.txt is in your C:\ drive.
If you need any further assistance give me an email at email@example.com and I may be able to assist you further.
Try all the procedures mentioned above. But it is also possible that the CD-Rom Drive could be setup wrong. It might be set up as a Master or Slave while another drive is setup to the same setting. Thiis action would require taking off the computer case and resetting a jumper on the drive itself.
Installing to a formatted HD with Win98se and the system hangs at the 'copying files needed for Windows Setup' message. I've swapped out the CDRom and have tried different versions of windows. Not sure what's causing the issue. Windows XP begins copying files but then is unable to copy a number of different files, eventually failing. System is an AMD 450mHz, 256meg RAM, 8Gig Maxtor HD, Nvidia TNT2 32 meg vidio.
Thanks as always