I have reinstalled windows 98 tons of times, (Maybe 50) On different computers, at least 15 on my own computer, every time I do, all I do is rename the windows folder to something like OLDWIN (By booting on a floppy into dos and using the command REN WINDOWS OLDWIN) and then I simply run setup.exe off the cd, when it asks you if you want to install to c:\Oldwin\ Type C:\Windows\ instead
Be warned: This does cause some problems because you may have to reinstall some programs, once you get your new windows load up, copy your favorites folder, and desktop folder, and anything else you want out of your old windows folder (C:\Oldwin\).
This is the method I always use, but you lose your registry, it only takes me about 20 minutes to reinstall everything, and you don't have to worry about any data loss, because nothing gets deleted. My documents, program files, c:\, etc is not touched. You could also try backing up your registry in the old windows load and importing it in the new load, but I have a feeling this will bring back a lot of problems, and there may be more stuff than the registry that you need to bring back.
In summary, this allows you to reload windows with no data loss risk, but you do have to spend some time putting everything back like you want it again.