If the following doesn't work, then your disc probably isn't bootable and/or not the OS itself.
Step-by-step:
1. Be sure you don't mind everything on the computer suddenly disappearing. Because it will.
2. Make sure you're fine with no. 1.
3. Same.
4. Place the cd in the drive while the computer is turned off. You may have to open it before you shut the computer down.
5. Turn on the computer, and if your BIOS is set correctly, and the cd is an actual install cd, you can follow the prompts to wiping the hard drive clean and installing 98SE.
Poof! W98 installed. No deinstaller disc necessary for your previous OS.
Nihil sine Deo,
Sharkfin
P.S. I'd also make sure that either (1) you never want to go back to 2000, or (2) you have restore discs for the computer.
P.P.S. Not to be repetitive, but I'd really, really make sure that you're fine with everything on the computer suddenly disappearing.