|Your hardware is probably OK. |
If you're worried about a bootsector virus, boot up with the 98 bootdisk and at the a:\> prompt type fdisk/mbr and enter. Do it twice. That'll refresh the master boot record and should overwrite any virus there.
You don't need to use the 98 disk to partition or format. Use the XP disk. Boot up with it and choose to do the install. When it asks where, it'll allow you to delete all the partitions. Do that and continue with the install. It'll ask about installing in the now empty space. Do that.
Your problems installing XP may not be because of a virus but rather the new hardware you're using. If that's the case you'll get the BSOD again. But if it all goes right you're still going to need XP drivers to set up the remaining hardware. Check the motherboard manufacturer's site.
Ding dong the witch is dead. . . .