I accept that you've got what appears to be a genuine problem but why, when you fdisked and re-did everything, did you re-format to FAT32 again and then use Convert? Surely, there's no need to re-format to FAT32 again? Using Convert will slow down your system, anyway.
 
I'm not an XP person myself but can't you just run the WinXP installation Setup and do the formatting, straight to NTFS, in that? Doesn't WinXP's Setup allow full and easy control of formatting? Win2K's certainly does. You'd run the XP installation disc and, at an early stage, it would ask you to momentarily insert your Win98 disc, just to check validity of the upgrade and then to allow it to proceed.

You have to start from scratch go NTFS, according to MS to avoid any issues.

Also... I heartily recommend NOT installing 98 and then upgrading to XP Pro. Boot off your WinXP CD and install it fresh. It will ask for the Win98 CD to prove that you qualify for an upgrade. Then freshly format the drive to NTFS in the WinXP installer.

Possibly Sway wants to do a dual-boot ?!?
 
If so, then you want to either have two separately formatted partitions or two separate hard drives to install the OS onto.
 
Myself I do this on my gaming rig so I can play those troublesome games under Win 98 instead. So I formatted the first 20G partition to a FAT32 type and then installed a fresh copy of XP Pro onto the second partition as an NTFS type.
 
Works well for me

He said he installed 98 and then upgraded to XP Pro, hence why I didn't think he wanted to dual boot.

Ah, I missed that part
 
Well then yes, you'd not want to upgrade at all then. A fresh install is most preferred. Of course one thing I didn't see being mentioned was if Sway has the upgrade version of XP. In this case you should still be able to install fresh but it should ask for the original Win 98 media to verify.

OK, so the general idea here is to reformat the drive and then to install from the cd via boot?
 
and should i go back to fat32 and do a clean convert, or what?

No, why do that if instead you want NTFS? It's best to format to NTFS in the straightforward way. If instead you format to FAT32 and then use the Convert command, you introduce overheads which will actually slow down your file searching on the hard drive. Forget about Convert. And the only reason you'll want to put the Win98 disc in the drive is to give WinXP Setup a sniff of it. The Setup will tell you when to put the Win98 disk in. It's just a quick check by the Setup that it's a valid update. None of Win98's files get loaded.
 
I think possibly in your mind you've got the order of things wrong. Boot with the XP installation CD and you'll probably find that, in the Setup sequence for installing WinXP, there's a HD formatting utility. Other contributors here with experience of WinXP will probably confirm that. You'll come to the utility naturally, as you go through the Setup for WinXP.
 
If it's there, you'll find that a lot easier to use than fdisk. Once in the partitioning utility, make an active bootable C: partition in NTFS, then leave the rest as an extended NTFS partition. Once Windows is all installed and running, you can further split up the extended partition in Windows (in the Disk Management section). It's a doddle to do it there.
 
Basically, just forget about FAT32 and the Convert command.

OK, I'll try all that, but here's the kicker: i currently have winxp installed. Will i be able to boot w/ the CD and still be able to reformat thru the setup and start fresh if XP is still resident?

Yes.

Yes as Vermyn stated. You'll get to a screen that asks if you want to do a fresh/new install, a repair of an existing install or quit the text setup function. Choose the fresh/new install. It should find the existing install, just use the delete partition option then you'll be able to reformat using NTFS by default. I would recommend however that you use the full format option rather then the (quick) option, if this is available. This will ensure a good clean format and will also let you know if there are any possible HD issues
 
Once the format is complete then it will start copying files to the HD and then after this process it will reboot. Just follow the on-screen prompts to install the rest of XP. During this process at some point it should ask for your Windows 98 media, the CD, if you do indeed have the Upgrade edition of Windows XP

Yup, I agree with all of that.
 
Normally, when I use this method to re-format, I deliberately leave about 300MB unassigned, ie unformatted. I do that because I read in one of my applications (Drive Image, was it?) that it's advisable to do that to enable some hard disk admin to automatically take place when necessary. By today's standards, 300MB is very little wastage.
 
Anyway, good luck with it, Sway.

I have the exact same problem after doing a factory "system restore." I have given up all hope that it can be fixed and will do another factory restore before cashing in on my warrent.y

Well I am proud to say that I am running NTFS great (so far for 12 hrs now heh) now after taking the above advice. Thanks again for all your help guys.

Don't forget any operating system service pack that you might need to install. For XP, SP1 is, I believe, recommended, but not SP1a (buggy). It's best to apply the service pack straight after installing Windows.
 
Then install the chipset drivers. Go with the latest ones, unless there's some special reason why not to. Then your graphics driver. Then the rest of your software.
 
Well done.
 
You can rename and re-format individual partitions, using Disk Management, which you'll find somewhere in Computer Administration (or a similar name) in the Control Panel. Disk Management is a very useful section, I find.
 
As I and others have pointed out earlier, it's best to use Windows Setup to do the HD formatting. Beyond that, I would also recommend that, in Setup, you format to just two partitions initially - C: plus an Extended. Then use Disk Management, once Windows is there, to split the Extended and create your other partitions. Also, at this point, in Disk Management, it's best to re-assign your CD drives to driveletters that are well away from C, D or E. Otherwise, you can end up with the driveletters not optimumly assigned. Still, you can correct it again, in Disk Management.