Sorry you are SOL. Win 98 is dead. WITH THAT OUT OF THE WAY, the solution i think is...
ok so you have a vista computer.
and your kids computer hard drive crashed...
and you have win98
and you have an old 40GB drive.
and want to install win98?. (i will ignore that fact the win98 is DEAD.)
NTFS WILL NOT WORK WITH WIN98.
BUT,
if I can recall correctly WIN98 only needed the "check disk" if it could not find evidence of an "installed OS" which happened often LOL.
first you will need to copy the stuff (back it up)on the seagate to another HDD, if you want to keep it).
next you need to remove everything from the seagate hdd including partitions. (vista can do that, start > control panel > administrative tools > computer management > storage > disk management
now be very careful!... what you need to do is right click on the 40 GB drive partiition and
"delete volume" until everything is gone. when you have a raw drive,
turn off your computer, disconnect the seagate and install it alone in the kids computer.
insert the win98 disk , install new os... and win98 is installed.
problem is, if the kids computer HDD really crashed you wont be able to get the games off of it... so you will have to reinstall them.