if you partition the different logical drives into NTFS and FAT16/32, then you will be able to install XP on the NTFS logical drive, and Win98 on the FAT16/32 logical drive. but not the reverse.
have you decided what you want to install on your primary partition. you can keep your primary partition i.e. your C drive as NTFS and install WinXP on it, and format your D (logical drive) as FAT32 and install Win98. make sure your MBR displays both OS as options when your computer is loading up.