How are you currently installing? (What method?)
If you have the 98 CD and the Product Key, you can use this
Win98SE Boot Disk*.
Just boot with CDROM support. With the CD in the drive, at the
A:\> prompt just type
setup.
Post back with your results and any further questions.
*The above bootdisk image file is a self extracting file and has to be executed (run) from a running Windows(9x) machine in order to create the actual startup diskette on one of your floppy disks. (This image file produces the same bootdisk which 98SE creates.) This downloaded image file will format the floppy disk to ensure its integrity, write the files to the disk, then verify the file write, so it'll take a minute or three to create the bootdisk.
Ensure the floppy drive is set as the first boot device in the bios.
http://www.d-a-l.com/articles/library/23.html
NOTE: When you boot a machine with this boot floppy, it creates a RAMDRIVE in system memory to contain DOS system tools/drivers. Thus it will move your "normal" CDROM device/drive letter "up" one level. (If your CDROM is normally E: it will be F: when booting with this bootdisk.)
The path to the found CDROM will be set with the bootfiles, so entering
A:\>f:\setup is the same as entering
A:\>setup at the
A:\> prompt. There is no need to include the cdrom drive letter. The CDROM device letter will be assigned near the end of the floppy boot process, right after MSCDEX is loaded.