Usually its best not to do an upgrade install of XP as, to use a technical phrase, it tends to play silly buggers
XP seems to check for the applications/hardware you have installed in 98 and uses that as the default way of installing. Problem comes when you've had different hardware installed and 98 still has the bits lying around.
One way you may be able to get it installed is by booting up the copy of 98 in safe mode, doing the usual windows key + break combination (or right clicking on my computer and choosing properties) and deleting the items from the computer properties that ar no longer in your system (usually extra graphics cards, sound cards etc.)
Another error I was encountered was that the IDE cable connecting the computer to the CD rom drive was too long and it caused random errors on copying the files over.