Your friend can not have a mixed XP/98 operating system.
What do they mean that word/excel etc are XP Professional?. They are an Office application running on whatever o/s has loaded.
The machine will boot to an operating system. Get your friend to right click on My Computer and choose properties. It will tell them what O/S is loaded.
128MB is not practically enough memory to run XP Pro. 256MB is absolute minimum and 512MB better.