Check that both computers are set up with the same workgroup name.
The default workgroup name in Win98 is WORKGROUP
The default workgroup name in XP is MSHOME
I found I had to spend some time persuading XP to decide to use the name WORKGROUP as I refuse on a point of principle to have MS in my workgroup name. For an easier life, rename the workgroup in Win98 to MSHOME