I would first make sure I have a clean Win98 EBR floppy, then boot to it like he says. In the BIOS, make sure you have your primary hard drive set so it recognises, it sounds like you either have a bad drive or one without a valid FAT16 or FAT32 partition, or you just have the BIOS set not to see the hard drive. Insure that both channels of the IDE adapter are ON. Also make sure your boot order is set to floppy, first HD, then CD if there is a boot option order.
Once you have the HD set (either manually or automatically), you should be able to boot to the A: floppy and recognise the CD with the OAKCDROM.SYS or other driver on the floppy. Then you can use FDISK to set for large drives, remove any non-DOS (example, NTFS) partitions on the HD, and install a FAT32 partition on it.
When you reboot again, use the FORMAT command to prepare the new C: partition and install Win98SE by selecting the CDROM, then running SETUP.EXE.