If you are going to install windows 98 after xp it will overwrite xp bootloader and you will no longer be able to boot into xp.For that you have to reinstall xp bootloader using xp cd.Then you have to add the entry of windows 98 in boot.ini file.I saw a windows 98 installer in my friend's system, that installs windows 98 using exe file and it don't affect bootloader.This installer can be run inside xp and you don't need to care about partition.Whenever you want to remove it just uninstall it using xp's add or remove control option.
I never installed windows 98 so I can't tell, it will ask for partitions or not, if we install it from boot cd.Since 98 came after 95, it should ask.