as mouse said, the bios cannot (i think) support that large harddrive, unless you update your bios or install drive overlay software.
98 installed occupies less than 1GB of hard drive space (that it is if you copied the installation files, if not it would chew 600MB or less)
i would only use a 20GB HDD, unless you want it to be your kid's main pc (like typing, doing projects etc)
Win98 runs smooth with at least 64MB ram. Don't install with only 32MB of memory, or else it runs very slowly.
Then install with the instructions posted by 8210.