[Cactus]

I think your problem may lie in you partitions.

Just some questions: You first harddisk has two partitions right? The second partition (I guess containing WinXP) is it formatted FAT32 or NTFS?
And the partition on that second HDD, is it an pirmary or an extended partition?

Some explanation:
If you use FDISK to create partitions, you can create primary partitions, extended partitions, and logical drives on extended partitions. Extended partition can only be created on a disk if that disk already contains a primary partition. All clear? Primary partitions come before extended partitions. Your primay partition will always be C:, logical drivers of extended partitions will be D:, E: and so on.

Now when you add a disk, and use FDISK to create a partition on it, you'll have to create a primary partion first, it won't allow you to create only an extended partition. But because primary partitions always come first, the primary partition of the second harddisk becomes drive D:, and the logical partiotion (on the extended partition of de first HDD) becomes drive E:

This is only the case when booted with Win98 though, WinNT/Win2K/WinXP will keep the logical partition drive D: because it assigns letters in a different way.

Now if your boot.ini was

[boot loader]
timeout=30
default=multi(0)disk(0)rdisk(0)partition(2)\WINDOW S
[operating systems]
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Micro soft Windows XP Professional" /fastdetect
C:\="Microsoft Windows 98SE"

if should now look like

[boot loader]
timeout=30
default=multi(0)disk(0)rdisk(0)partition(2)\WINDOW S
[operating systems]
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Micro soft Windows XP Professional" /fastdetect
C:\="Microsoft Windows 98SE on the first HDD"
D:\="Microsoft Windows 98SE on the second HDD"

Tell me more about your partitioning scheme, and the sort of format you used if this info isn't enough for you to get it working . . .