Yes, you can't just copy your programs over and have them work.
Copy over your personal documents like pictures, letters etc. onto a flash drive, CD or DVD. Re-format, with just winXP on (get rid of win98), copy your personal information across, and install all your programs again from the CDs you have.
Note: if your PC is old enough to have come with win98, is it fast enough to properly cope with winXP? Usually it'll make the computer very sluggish: if you happen to have a copy, I'd recommend using win2000 instead of winXP.