|Check the cable on the floppy drive. Also verify you have the BIOS set for the correct type of floppy.|
Watch the POST screens to verify the CD drive is properly identified by the BIOS. Just looking at the configuration screens is not enough.
If the boot order is not set for floppy first, CD second and then hard disk then the computer won't boot to either the floppy or the CD.
Only SOME Win98 CD are bootable. Most require the use of a boot floppy.