Conventionally 98 insists on installing on Drive C: though you seem to have found a way around that.
The main point is that you installed 98 first.
I have used W2K for a couple of years now and it suits me fine.
Like XP it has far more drivers available for add-ons, knows all about USB and very capable of most plug and play procedures.
It can be quick to boot and is more stable than 98SE.
It lacks useful things like msconfig.exe but this can be added later easily.
My unscientific opinion is that forget ME, you have a worthwhile upgrade to many things and 2000 is much closer to XP than the once top of the tree 98.