How to Setup Windows 95/98/Me on a Windows 2000/XP System
I love Windows XP. Best version they've come up with yet, in my opinion. It makes setup of new computers and networks a breeze. But, it does have a few problems running some older programs that can't be solved by running them in compatibility mode. I did a quick search of Google, but was unable to find a definitive list of programs that have known compatibility issues. I did find 2, both utilities - PowerQuest's "Partition Magic 6.0" and Norton's "SystemWorks 2001". The program that I couldn't get to run in XP was "Easy CD Creator 4.0". The solution for me was to either buy upgraded software, or using the tools I had on hand, create another partition on my hard drive and install Windows 98 on that, in order to run the older programs. Not wanting to spend money to upgrade software that had worked well for me before, and having plenty of hard drive space, I chose the second option.
Here's the setup I'm working with, which I consider to be a pretty typical (if older) machine:
I'm using an Iwill KK266Plus motherboard, AMD Athlon Processor at 1.2 GHz, 512MB of RAM, and a 30GB HDD running a single partition. Windows XP Professional and Service Pack 1 are installed. I also have disks with Windows 98 Second Edition and PowerQuest's "Partition Magic 7.0". You'll need "Partition Magic 7.0" or "8.0" (the latest version), as anything earlier won't work in an XP (NTFS) environment.
The first thing you want to do is backup any files or folders you don't want to lose. You should ALWAYS back up vital files before doing any low level disk operations. Once you've gotten things backed up, go ahead and install Partition Magic on your XP machine. This is pretty straightforward, so I won't go into any detail on how to do that. Make sure you install the PQ Boot program with it - it should be checked by default anyway. When prompted, make the rescue disks. These will allow you to boot to your "home" partition (Windows XP) if anything ever goes wrong. Once you have it installed, go ahead and open it up. You should see a screen that looks like this:
You'll notice that I have one 30 GB partition, formatted NTFS, with about 6 1/2 GB of programs, games and MP3's on it. I still have 23 GB of free space, and as all I want for Windows 98 is 3 GB, I have plenty of room to work with. Notice the 4 little arrows around the partition bar?

These represent the hard drive boundaries at 2 GB and again at 8 GB. The reason these are important is because if you are going load Windows 95 version "A", the partition it resides on needs to start below the 2 GB boundary of the hard drive to be bootable. With Win95 version "B" and Win98 the partitions must start below the 8 GB boundary to be bootable. Most systems nowadays support INT13 extensions automatically in the BIOS, so WinMe, W2K, and XP shouldn't have a problem booting from a partition that starts past the 8 GB boundary. Anyway, the point is that you want the new partition to begin before the current XP partition, in order for the new partition to boot.
Go ahead and right click on the partition bar. Select
"Resize/Move . . . ", and
resize the partition, adding free space before, either by grabbing the left side of the bar and moving it to the right, or by using the arrow keys next to the "Free Space Before" field, or simply type in the amount of space (in megabytes) that you want. Make it what ever size you need - as you can see, I have resized mine to give me 3 GB of free space for my Win98 partition. Bear in mind that if you are installing Windows 95 version "A" you are limited to a maximum partition size of 2 GB (limitation of the FAT file system).
Click "OK" and you'll be back to the main screen, only this time it will show that you have unallocated space before the XP partition.

Do a right mouse click in the gray unallocated space, and choose the "Create . . ." option. This will open up a "Create Partition" dialog box. (below)

Now remember what I said about the 2 GB limitations of the FAT file system? You'll see when the window first opens, that the default settings are "Logical Partition" and "FAT", and the size is maxxed at 2,047.3 MB, no matter how much space you allocated. In the "Create as:" field you need to select "Primary Partition", since you are going to be installing an operating system on it. In the "Partition Type" field, you need to leave it as "FAT" if you are installing Windows 95 version "A", as this version of Windows does not support FAT32. Change it to "FAT32" for Win95b, Win98, and WinMe operating systems. The other options available are NTFS, Linux Ext2, Linux Swap, Extended, and Unformatted, none of which we will be using here. You can enter a label now, later, or never - I never label disks myself, but that's just me. Leave the size as the default of whatever you allocated for it, the usage will be 100%, and don't worry about the drive letter for now - this is going to be changed, as the partition will be hidden when we're done. It should look similar to this (below) when you're done.
Click "OK" and you are back to the main screen, only now your previously unallocated space has been transformed (almost) into a green-bordered FAT32 partition. Looks good so far!

Now you need to click on the "Apply changes" icon in the lower right hand corner of the main screen to actually transform it into usable space.
WARNING! Make sure you have all other programs closed before you click the icon. You weren't really doing anything else while you were doing this? - OK, OK, I've been listening to Hawkwind, Barry McGuire, and Buffalo Springfield MP3's :- ) Make sure you don't have any floppies or CD's in your drives also before you apply the changes.
Your computer will reboot and go into DOS mode in order to effect the changes. This might take some time depending on your configuration, so take a break and let the machine do its thing. Now let me digress just a bit and talk about backups. While your machine is in DOS mode, doing these low level partitioning operations, what do you think would happen if the power went out? Think you might lose some data? Like maybe all of it? It could happen. Be safe, and back up anything you don't want to lose, OK?
After your machine finishes its operations, it will reboot again into WinXP. When we get to that point we'll continue on page 2