Jack,
Just what are you trying to upgrade to Windows 98SE? The upgrade version won't work unless you have an older version already installed as it uses some of the older files and overwrites them. If you are going to do that and don't just have an older version of Windows 9X, you will need the full install version.
Mike,
I am guessing that he has some programs that won't work on XP. A man that I know who owns a body shop did that and he had all of his custom paint codes and such stored and he had to go back to Windows 98 in order to run the program correctly. It wouldn't even work in the so called comaptibility mode. So he now has two computers until he can get the XP version of that paint program installed and transfer all of his custom mixes into it.
Ron