They can definitely talk to each other...two things to remember because they are different OS's ..make sure that NetBIOS over tcp/ip is enabled on the 98 comp and when setting up a name for a shareable file..do not use more than 12 characters. If he only shares the files he wants to share..there...
Check this information to see if yours is configured like this.
<A HREF="http://support.microsoft.com/default.aspx?scid=kb;en-us;318030">318030 - You Cannot Access Shared Files and Folders or Browse Computers in the Workgroup</A>
Maybe this link will help you.
<A HREF="http://support.microsoft.com/default.aspx?scid=kb;en-us;Q321641">Q321641 - How to Troubleshoot Issues with Reading CD, CD-R, CD-RW, and DVD Discs</A>
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