Check out this site and run the Windows XP Upgrade Advisor.
http://support.microsoft.com/kb/316639
A quick look at the spec for your laptop suggests it has the capability to run XP.
If you do decide to upgrade – make sure you back up all important data, otherwise expect to loose it.
Personally, if you have enough hard disk space, I would partition the drive and have both operating systems on the laptop. That way, if certain critical applications/peripherals don’t work on XP, you can easily revert to 98.