Follow Beta's advice. Do not use fdisk.
The file is bootsect.dos, and not bootsect.dat (there are some occasions when you will have a bootsect.dat file, but not here).
Before reinstalling 98, an extra precaution to take is to make a bare boot floppy which can boot you into XP.
Boot into XP (not 98). Insert a floppy. Right click drive A and select Format. On the small window that appears, click Start (and do not tick any of the options). You must take this step even if you have a brand new floppy, and you must do the formatting within XP (if you want it to boot).
After formatting the floppy, copy the 4 files ntldr, ntdetect.com, boot.ini and bootsect.dos from your C drive to the floppy.
Test your floppy by restarting the computer with it. Make sure that in BIOS, the floppy drive comes before the hard disk in the boot sequence, otherwise your computer will still be booting from the hdd and you will not be testing the floppy at all.
The computer should boot from the floppy (slightly slower), and you will still get the same OS selection screen. Select XP. If it goes into XP all right, the floppy works.
Remove the floppy. Keep it safe.
Use a 98 startup floppy to format the C drive. Do not change the partitioning of the hard disk. Then install 98. After booting into the fresh copy of 98, copy the 4 files from the floppy back to the C drive (not C:\Windows).
You then need to repair the boot sector so that it will use the XP boot loader instead of the 98 files. Follow Beta's advice to use Recovery Console to fix the boot sector.
To use Recovery Console, restart with XP CD. At the Welcome screen, press R. Select the XP Installation (usually only one), so press 1, and press Enter. You will be prompted to enter the administrator password. Do that, and you'll get to the D:\WINDOWS> prompt (assuming XP is on D drive).
At the prompt, type fixboot and press Enter. You may get a message that the boot sector is corrupt or something, do you want to proceed. Confirm the action.
After that's done, type EXIT and press Enter. The computer will reboot. Remove XP CD immediately.
If for any reason the repair of XP does not work, you can use the XP boot floppy to boot back into XP in the meantime (provided you have not changed the partitioning of your hard disk - so don't use fdisk to change the partitioning). Then post back. There's another way to repair.