If you boot from the floppy it should come up and ask if you want to run with CD-Rom support.
The floppy is only used to boot from the cd. Once that option is reached the floppy should no longer be required anymore.
When he fdisked the drive did he go through all the necessities. i.e. making the primary dos drive active, format the drive after etc.?
Alternatively go to
www.bootdisk.com and make a bootable cd from the 98 floppy! No need for the floppy drive anymore.