Start by booting the system into Windows XP. Explore the folder that contains Windows 98, searching for all personal files or documents; move them to a safe place. Then just delete the entire folder that contains Windows 98. You may need to confirm that it's okay to delete read-only files, executable files, and so on.
Now select Run from the Start menu and enter MSCONFIG. Click on the tab entitled BOOT.INI, and click on the button that says Check All Boot Paths. Your system will report that the path used to launch Windows 98 is not valid and offer to remove it. Click on Yes. From now on, your system will boot directly to Windows XP.