first of all, do you have data you want to back up?
if so, do you have a CDRW drive?
if not, do you have a secondary hard drive big enough to save all sorts of driver files etc (preferably about a gig, I know, I've done this alot).
if not, do you have a seperate partition on your single drive that you can put your stuff on while you format the primary partition?
if not, perhaps you should write down a list of files (or programs) you need to get to get your computer up to date after you install windows (like Direct X, A3D 3.0 API if you have an Aureal soundcard, the latest drivers for your video, sound, network, etc, and all the little applications you want to keep). You'll also want to get all your text files that you created backed up (normally they can fit on disks unless they include pictures).
after making note somewhere (if you haven't backed it all up) where to get your stuff, then decide what you are going to have to install to get the basics up and running so that you can get these files (like winzip, or whatever) off of the internet, without having to install old files and then installing ontop of them newer ones (that's messy, it contributes to slowness).
then when you are sure about that, you can go ahead and format the C:\ (format /q C:\ is the quickest way, and deletes ABSOLUTELY everything on that partition).
then with windows 98 you tell your computer in the BIOS to boot from CDROM (if it can't, then you need to create a boot floppy, and set the BIOS to boot from your floppy drive), and insert your windows 98 CDROM before you boot up after your format. then after it initially boots from the CDROM, it will ask you what to do (boot from HD, from CDROM I think).
basically the rest is easy, though sometimes installation of programs and drivers can be somewhat annoying, and hard to master so you get it the first time.