I am sorry but I didn't read the previous posts but I will try to answer this to you in a hurry.
I had the exact same problem like you did. First I would recommend you to divide your hdd like this:
5GB FAT32 (you may install your WINXP there)
and 2 x 25GB for games, progs and stuff.
DO NOT install Win 98. It is unstable and not reliable and don't use NTFS because if it gets screwed up, you will loose absolutely everything on your entire disk, while with FAT32 you will be able to recover your data. By the way, did I mention that with FAT32, you will be able to format your HDD easier and that it is operates some 30% faster than NTFS.
By the way about FDISK. Make a boot disk from a Win98 Operating System, put it into your WINXP machine, re-boot with the boot disk insterted in your floppy drive. Then you will enter the Command Prompt (the old DOS) and type:
a:
and then type:
fdisk
then you will enter the prog you need for your job.

One more thing. DO NOT INSTALL WIN98 on your system. It SUCKS!

Stick with Win XP. I am telling you this from my own experience.