|If your formatted the HDD, how are you getting a command prompt? It *should* display, "no operating system found".|
Many Win98 CDs aren't bootable. You'd need to boot off a boot floppy to load the CD drivers, THEN you'd be able to run Windows setup from the DOS prompt. The CD drive letter would most likely be E, not D.
Since you have no floppy drive, you'll either have to create a bootable CD or somehow copy the contents of the 98 CD to the HDD, then run setup from there.