|"invalid system disk" means that what ever the bios is set to boot from doesn't have a valid boot sector.|
Windows 98 cd's normally aren't bootable unless you have made it bootable yourself. If you want to reinstall win98 get a win98 bootable floppy disk(do a search and you should be able to find an image) boot from it with cd support and start setup(again do a search lots of detailed instructions out there).
As for xp like mentioned above the pc is probably too old and not supported, but a damaged cd, bad ram, ect. could all be issues.