Before doing anything be sure you do the following:

1. Back up any important data - everything will be lost once you format.
2. Make sure you have the install media (the CD) and if an upgrade that you
have the qualifying product (either Win 3.1 disk set or win95 CD)
3. Make sure you have the product code. It is easy to find prior to
reformatting. Once you do it, it can not be obtained from the system.
Typically, it will be on a sticker on the CD case or on the computer if OEM.
To find from windows:
use  start run and type in regedit. Navigate to the following key and look
for product key:
HKEY_LOCAL_MACHINE\Software\Microsoft\Windows\CurrentVersion

Formatting is relative easy.

1.Make a Win 98 (or 98SE) Startup disk (it will include CD support)
The disk was generated during initial install. If you do not have it you
can use start ---> Settings --> control panel --> add/remove programs -
Startup disk to make one.
Alternatively,  insert the win98 (SE) cd and navigate to
tools/mtsutil/fat32ebd. Run Fat32ebd.exe by double clicking. It will
generate a startup disk.

2. Set Bios boot order to A:, C: if it is not already.
3. Insert the startup disk and start (or restart ) the computer. It will
boot to an A:> prompt.
At the prompt type Format c:   (assuming C: drive is the one you want to
format). Remember once you do this all data, programs and information on the
C drive will be lost.

For information on installing W98, go to:
http://home.satx.rr.com/badour/html/w98_restore.html