As to OS on a usb-connected drive = technically possible TOTALLY unfeasible. Possible because some USB adapters can be made to function with DOS drivers and then masquerade as a bootable device in your BIOS setup. Trust me, you don't wanna go there.
MS just (surprise!) extended w98 formal support through 6/2006 - this days before formal mothballing was supposed to occur. Many major software houses began to withdraw w98 support over a year ago and, because designing for NT vs. DOS is different, you can expect to see rapidly waning w98 support.
You are much better off to either dual-boot off your existing drive (space permitting0 or purchase a second drive. Drives have gotten very inexpensive (newegg.com).
IMHO, it's foolish to dual-boot win98/NT unless you have a *specific* need to (employed as app tester, dependency on some strange & legacy w98-only app) Many people attempt to justify dual because they are nervous about an all-at-once switch away from what is familiar. Without fail, however, it's more technically challenging to create&maintain a dual boot system than it is to just switch. To minimize the pain do it thusly:
> Disconnect your existing drive (no need to remove) and install another drive (new) as master.
> install win2k, apply sp4, then apply all post-sp4 patches. Install all device drivers & apps (you'll need w2k specific)
> power-off & re-connect your old drive as slave
No you have access to all your old files on slave and can slowly migrate them over to master as you ID which are valuable enough for longterm storage. When all files are organized & you are confident you no longer need anything on slave then format it as NTFS.
If you desire a USB drive for portability recommend you consider a USB enclosure (box only - you put a device in) then you can pull the slave (old) drive & use as detachable - or put any IDE device inside. They cost about 40$ for a 3.5".
typed out. bye.
