The Network menu, on the xp machine, should have "add a network place" on the upper right side of the screen. Then you select "add another network place" rather than the MSN places, and select microsoft workgroup.
Network icon (desktop)->Add a network place (under "network tasks)->NEXT->"choose another network location"->BROWSE->Entire network->Microsoft windows network->MSHOME->computer list should come up....
If I am incorrect, I've only networked xp->xp and mac->xp
let me see what i can find. But you should have that option on your xp machine
If your XP drive is NTFS I don't think the 98 will be able to see it....however xp shouldn't have any trouble reading off of the 98.