I'm not sure what you mean by a "mobile rack", but I think you actually have to have a controller that allows Hot-swapping in order to do this. And usually those are the RAID controllers that you get in expensive Servers.
So, the answer is a definite no. It could not only damage the drive, but possibly the motherboard if you were to put the hard drive in while the computer is on. Not only that, I doubt Windows 98 would even recognize the drive anyway, since the BIOS has to tell it what hardware it has.
<i>I don't know anything about computers... but I did stay at a Holiday Inn last night...</i>