I don't think it's possible... (ok you supergurus, if it is, tell me too how
heh) or if it is, it's difficult
1) you would need to create partitions for linux, the type of ext2 or ext3 or so on. windows98 uses fat32, which does not allow setting permissions and so on, so I don't think linux can run on it.
2) if you find a program that can create linux partitions (can PartitionMagic? I don't know...), and are able to create some (which means, you'd have to resize your fat partition on-the-fly if you don't have some partitions to delete), you would then have to copy stuff over to that partition. I don't know how you would do that, since windows can't, as far as I know, read linux partitions (linux can read fat, though). so you would have to move stuff into linux partition to make it bootable, and also install apps into it, which is - from windows - quite impossible. windows doesn't support this type of things.
the other possibility would be to create a boot disk on a floppy - that is, use some existing linux machine to create a bootable floppy disk, and put some apps into it (or some other disk) like fdisk and so on, so you can start the installation. then you would have to boot the machine from a floppy, re-partition your harddrive, install a kernel in the HD and so on. it is possible, but may take some time...and when the system would be bootable, if it could be connected to net, the rest could be downloaded and installed. but you would have to use a floppy disk to create a working linux install...
imo the floppy-method would be easier than to try and figure out how to do it from windows. windows simply sucks in this matter, since it can't read any linux partitions (only few of it's "own" types like fat16, fat32 etc.), cannot create them etc. it's just a bunch of crap that can't do anything else but make you pay