Dude, dybbody has explained one method.
but I notice you do not have a fdd.
well here is the method that works without a fdd
download this file
http://www.hirensbootcd.net/downloads/usb_format.zip
its a program that is used to format usb pen drives
download this file, its a w98se bootdisk
http://amsterdam1.plunder.com/x/$70MtqtwpK4FrWo-_Yn9etvJ0q3cqaqcC/a2d35faa/Windows98_SE.zip
download this file - winimage
http://america.winimage.com/download/winima81.exe
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so, you should have the following
win98se boot disk image
Winimage
USB Format program
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ok, here's what you do.
1 unpack the win98se file. Make a note of the location it unpacks to
2 unpack the usb format program
3 install the winimage program.
4 Run the winimage program
5 select the open file icon (the one with a yellow folder with green arrow on it)
6 go to the directory that you unpacked the w98se bootdisk image to.
7 open the Windows98_SE.img file.
8 this will then show the contents of the image in the right pain in winimage.
9 hit ctrl + X at the same time (ctrl and X), this will open a dialog box. make a note of where it is extracting to.
10 put your USB thumbdrive/pendrive in computer. make a note of what the drive letter is if you have more than 1 usb peripheral connected. (it would be safer at this point to disconnect any usb drives that you have connected. leaving the pendrive the only usb drive connected. (would not want to format the wrong drive now would we )
11 run the usb format program.
12 at the top there is a device dropdown, select the correct usb letter if it is not already displayed
13 I would leave the file system at fat
14 Give the device a name if you like (usb boot disk)
15 select create a dos boottable disk
16 browse to the location that the winimage programe extracted the files to.
17 click on start.
the usb drive will be formated and some of the win98 files will be copied to it.
your drive should now boot your pc.
Note that you may need to change boot priority in bios to enable the pc to boot from usb pendrive.
hope that helps
let us know if you have any problems.
just give us the nod also if it helped.