Oh, darn, I was thinking about Win XP when I explained the procedure. The screens in Win 98SE are different, as you would obviously know.
I just tested the procedure under Win 98SE and, yes, you would need a CD unless you have CAB files on your hard drive. By that, I mean you copied Win 98SE installation/setup files from the CD onto your hard drive. If you've done this, you would not need the CD since the procedure we're discussing would look to those CAB files for the needed program, not for the CD. But, I'd guess you, like most users, don't have those CAB files on your hard drive. So, again, you would need your CD. Sorry about not thinking to mention that in my previous reply.
And, regarding other programs under Accessories, no, they will not be wiped out as long as you do not uncheck the box next to them.