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MS Virtual PC is free and may help you get off to a quick start too.

Both programs emulate a PC with its own HD, Memory, etc. You lose some performance vs. runninging a native o/s but you don't...

I think that as long as the WIN98 partition is FAT32 and that the boot partition has XP installed then you can have that partition as NTFS.

What I mean is that your NTFS partition can boot up both...

NTFS is the way to go, you get the most out of your HDD plus gain security benefits (such as permissions). It's been around for a long time and will continue to be around for a while.

Just...