install windows 98 after windows xp the hard drive is pationed into three with 2 using fat32 format the other is ntfs

If C:\ is FAT32 and contains Windows XP and D:\ is FAT32 and empty and E:\ is NTFS, then the D:\ drive is where you want to put Windows 98.

I think you'll probably need to boot Windows XP to a command prompt and then run the Windows 98 install from the CD-ROM (or copy the files from the CD-ROM to the D:\ drive first).