Windie:
Sounds like you are booting to the Windows 98 DOS and then running the Windows 95 setup. This cannot be done, as Windows 95 uses a different version of DOS than windows 98.
Instead, use the Windows 98 floppy boot disk to format the hard drive with FAT (if you have the original release of Windows 95) or with FAT32 (if you have Windows 95 OSR2), then install Windows 95.
CAUTION: Formatting the drive will delete all files on it.
Let us know if you need more help,
Doc