I would recommend making a boot disk from the Add-Remove Programs option in Control Panel, I don't know what tools your boot disk has, but I know the control panel one has everything you need.
Basically, restart your PC with the boot disk in the drive.
Check your CD-ROM drive works, enter "<drive>:" and then key in "dir" to check it works and can read your Win98 CD.
Often the CD drive is one letter further down from what it is in Windows, because Windows makes a temporary drive with some of your RAM to store diagnostic tools on when you use the boot disk.
Then key in "format c:". If you are in a hurry you could do "format c: /q" instead, to do a QuickFormat (if C is your boot drive).
That will wipe your whole hard drive.
Then just change drives to your CD drive (<driveletter>: ), and key in "setup". Then follow the instructions in the wizard .