It will work, wherever it is. Install Windows 98 first, then start installing XP. It will ask you if you want to keep the existing OS on the disk. Tell "yes" and continue as instructed by the setup program. Chose whatever you want as the target (D:, E:, X:, etc.). It will create a bootstrap in C, which will act as a boot manager and will ask you each time which OS do you want to boot and will let you choose.
You probably don't want to do that, though, since making Windows 98 working with more than 1GB RAM is problematic at best, and running Windows XP with less than 1GB is slow.
GA-6VTXE PIII 1.4+512MB
Geforce4 Ti 4200 64MB
Diamond Monster 3D 12MB SLI
SB AWE64 PNP+32MB
120GB IDE Samsung/80GB IDE Seagate/146GB SCSI Compaq/73GB SCSI IBM
MSDOS 6.22+Win 3.11/95 OSR2.1/98SE/ME/2000