Windows 98 is relatively easy to install on Virtual PC. It requires a drive image that is at least 300MB in size. A larger hard drive image should be created if you want to install applications on the boot drive. Because Windows 98 supports the FAT32 volume format, you can use a hard drive up to 128GB. If you want the same drive to be readable by Windows 95, older versions of DOS or Windows NT, you should create a FAT16 volume instead (limited to 2GB in size).
Most Windows 98 install disks are bootable, so installation is relatively easy.
1. Create a new PC by clicking on the “New PC…” button in the PC List window. Let the “New PC Assistant” guide you through the PC configuration process.
2. After the PC and the hard drive image have been created, insert your Windows 98 CD and start up the PC.
3. The Windows 98 should boot directly into the Microsoft installation program. Follow the instructions to complete the installation.
NOTE: You will need your Windows 98 serial number (usually printed on the CD case or on the accompanying manual) to complete the installation process.