After many , many failed attemps at installing Windows 98 in a Transcend CF200I CF card (I have another and never faced this problem) , when everything else seemed fine I found and old thread elsewhere which helped me. This worked:

1. Restart with a bootdisk
2. type fdisk /mbr
3. run fdisk
4. Select disk 1 , delete all partitions
5. exit fdisk and restart with the bootdisk
6. type fdisk /mbr
7. Select disk 1 , go to option 1. Follow all defaults (Max size of partition , no label, make primary active partition)
8. Exit fdisk
9. restart.
10. Install win98 with bootable cd or from a harddrive using the bootdisk (As I did)

I hope this come in handy if some is having has the same struggle that I had.