So when you place the old Win98 drive in place of the CD Drive IDE Connection your computer then tries to boot from that old drive instead of the new XP Sata drive
You need to go to system CMOS settings and access the Boot configuration and disable, or move IDE or ATA01 down the list
Usually CMOS is accessed by pressing DEL or F2 or some other F# key, which is displayed when you first turn on your computer (you must be quick to see it, and then press the key)
Then save and exit CMOS Settings (ie F10)