RESOLUTION
To resolve this issue, you need to free enough space on the hard disk to
install Windows 98.
Windows 98 requires 225 megabytes (MB) of available hard disk space for a
typical installation. The amount of free space required can range between
165 MB and 355 MB, depending upon your system configuration and the
options selected.
If you cannot free enough hard disk space to install Windows 98, you may
need to uninstall Windows 98 and revert to your previous operating system.
For information about uninstalling Windows 98, please see the following
article in the Microsoft Knowledge Base:
ARTICLE-ID: 186102
TITLE : How to Uninstall Windows 98
After you uninstall Windows 98, free the necessary amount of disk space
to properly complete the installation of Windows 98 by uninstalling
unnecessary programs and deleting unnecessary files or folders.
For information about how to delete files and folders in Windows 95, click
Start, click Help, click the Index tab, type "delete" (without quotation
marks), and then double-click the "Files or Folders" topic. If you are
using Windows 98, double-click the "Deleting Files, Folders"
topic.