It's normal that your cd rom does not function in the safe mode
because safe mode does not load any device drivers and without driver
you can't run or access your cd rom..You could modify your
autoexec.bat and config.sys to load 16-bit DOS driver and than load
your system. Some one gave you a good example on how to do this. If
you don't know what I talk about please take your computer to computer
store and have professionals take look. If you live in Des Moines
check hitech-solutions.com

Am going to finish with my favorite quote:

"The greatest enemy of knowledge is not ignorance, it is the illusion
of knowledge. " -Stephen Hawking


I am surprised that people are still reading and replying to this..
if he had a win98 CD then he should be able to simply boot/install from the
CD itself.. His stuff might not be current enough to allow it but I would
guess it is.. plus it's no work involved compared to the other stuff listed
just hit the power button, put the cd in, see if it boots from the CD (you
might need to go into the bios and choose the CD first)