Why don't you make a new partition (of any file format) move all your important files over, and upgrade to 2000/XP? it really is worth the upgrade from 98. it fixes a ton of bugs, but i'm not gonna list them all because there is no way one man could remember them all.
anyhow, just use partition magic to make a new partition, move your files over, and upgrade your windows using the existing partition.
i wouldn't recommend resizing a partition if at all possible...it can easily corrupt it (even though it's not common for that to happen...it is possible...and has happened to me)
*jeremy