Apparantly to help stop the spread of the ever growing number of Windows virus and bugs etc - MS have decided not to restrict SP2 to legit copies.
Anyway back to the question - if you have a set of installation discs for Windows 98 or Windows ME - you will only need to buy a copy of Windows XP Home up-grade version. When you use this - it will ask
you to put the CD for the early version into the drive to check eligibility for the up-grade version. There is NO need to actually install Win 98 or ME on your P/C.