I hope someone can help me with this problem I have...

I run Win98 SE (freshly installed a month ago, used Win2000 previously) and want to (re)install Win2000 to have a dual-boot. The reason behind this is, of course, games. I'd like to have win98 OS and drivers only system with Win2k as my primary OS. However, regardless of how I install win98 and other programs, this problem keeps reappearing:

No matter how I try to install Win2k, when the setup starts copying files from CD-ROM to disk (or from disk to disk), some files can't be read at all. Problems with CD? Don't think so, since I copied them to disk without any problems or slow CDROM functioning and retried to copy from disk - same files, same problems. Even getting occasional blue screens. Problems with this Win2k pro version? Don't think so, since it used to run 2 months ago with no serious problems. Plus, I borrowed a win2k pro version from my company, just to make sure it wasn't my win2k giving me headache. No change whatsoever. So the problem is copying the files - why?
I try to install both OS' to a C partition using a 40 GB (2x20GB partitions) disk with FAT32. This shouldn't be the case since the setup only copies files, not runs them. I have read almost all troubleshooting I could find anywhere, but still no solution.

I have P3-800 Coppermine, Abit BE6-II motherb., 384MB RAM, 40GB and 20GB disks, SB Audigy Player, Leadtek Geforce 2 MX, 2 network adapters.

The error message you're getting is common with RAM issues. I know you can install '98 OK (it isn't quite as 'picky' re RAM as W2K, even though it is picky...), and I understand you managed to install W2K previously...

But first port of call - presuming remainder of system is truly W2K compliant = RAM...

Perhaps remove all but one stick and try afresh' (try each stick in turn); also verify all sticks are same spec etc...

This whole RAM issue was flagged up by a chap in virtualdrcom some 2/3 years back. He described it as classic M$ mis-direct; i.e. you are prompted to think the CD or the CDROM is suspect - but NOT RAM... It occurs with NT4 and even more so with W2K. Strangely it doesn't seem to have popped up (yet) with XP???

I'm reading that you haven't managed to copy the i386 across to the drive successfully either - with a view to installing from the hard-drive?