It has been my experience, as a computer technician, that upgrading your OS tends to inherit the headaches you're trying to leave behind. If you have all of your important files backed up already, or can do so without tremendous headache, I recommend a fresh install on a clean, empty hard drive. This way, even if you DO run into trouble, you know it's not a carry-over from Win98. You can install even the upgrade of WinXP on a clean drive, as long as you have your 'qualifying product' handy...in this case, your Win98 CD. It will ask for it at some point, if your HD has no OS on it. Also, if you install WinXP on a blank HD, the only format option you'll get is NTFS. Don't worry about this, it shouldn't cause you any trouble. NTFS is the preferred file system format for the NT kernel operating systems, and will afford you a tad more drive space, and a lot more drive security. Good luck on your impending upgrade, I think you'll be pleased overall with the performance improvements. I've been running WinXP since Beta 3, and haven't had a single major issue with it, only a few minor hiccups with some of my older legacy hardware and older software...all of which were fairly easy to remedy.