Outline, (not "Great Detail")
You have your W98SE up and running, all the basic stuff like modem monitor and printer working?
The rest is patience.........All you applications will have to be re-installed from their disks.... This is to integrate them in your new o/s.
Then the various tweaks and lesser programs to make things run the way you want them.
Data as such, can simply be dragged off the old HDD into the new folders you have made on your new drive.
If it is not too late, or you have Partition Magic, I would strongly recommend partition of Drive C: with the o/s as small as you can say 3Gb keep all the applications on a what's left of your 20Gb, then you can make an "image" of c: park it on "D:" against the day when your Win98SE becomes so grotty that you feel like re-installing