Upgrade to WIn98se without Regular Upgrade

The CD may be the full version, however there are two different full versions. One is the one you can buy retail. The other is called an OEM version.
This OEM version is supposed to be only supplied with a new computer. This version is for sale as a stand alone on Ebay and other online vendors. There is a condition some piece of hardware must be shipped with it.
The difference between the two is this.
The OEM will only install on what windows setup perceives as a newly formatted drive, else you get prompted to use the Upgrade version. This is the version that you seem to have.
The way to get around this is to rename Win.Com to anything else you choose, as long as Win.Com is not to be found anywhere, setup continues as normal.
The following command renames Win.Com to Win.Old, the reason for the renaming is that you can name it back, and if setup has not went too far, the existing windows can be used.
ren c:\windows\win.com win.old
If you have tried renaming and got nowhere, perhaps windows is installed into a differently named folder. Do the following command at the prompt.
dir /a:d c:\
This will show a listing of all folders connected to C:\. All you need to do is change the ren command up above to reflect the existing installation folder. For example, if you see a folder named Windows.001.
ren c:\windows.001\win.com win.old
This can present other new problems if the current installation of windows is installed into C:\Window.001, as windows 98 is better installed in C:\Windows.
The problem that is most likely to occur is when you install programs. Some setup programs do not look in the registry or check the %WINDIR% variable to check what the name of the folder windows is installed into, instead they just put files into C:\Windows, and when windows looks for them, they are not found as windows would be looking in Windows.001. You are better off with windows installed in C:\Windows.

 

Thanks, Have been away

Selling a couple of ir rifles and fishing reels.

Will get back after I apply the information you have graciously provided.