try this link
Bart's ways to create Windows bootable discs
OR
To make a CD capable of booting into Windows off a harddisk copy your system drive's MSDOS.SYS to a floppy, use Nero or another program to burn the floppy disk image... Copy format.com, found in \windows\command or on the windows setup cd to the cd also of course. MSDOS.SYS is tells computer where your windows files are and which drive they're on.
MSDOS.SYS is at root directory (like C) and is hidden+system+read only. If you were to replace the msdos.sys on a floppy with msdos.sys from a Win98 installation you could probably boot from Windows using a floppy/bootable cd...
You said to boot the Windows system also. I don't know exactly what that means but if it means to boot the entire Win98 operating system from a CD, I've found it to be possible only in Safe Mode, and it's very slow, and many "Unable to write to disk" errors occur. To make this CD you could try this...
0. Disk size must fit on the CD or DVD. If it does you can easily create a boot CD using Nero...
If not, go to the Internet and find "Ranish Partition Manager".
1. Open part.exe and reduce the number of ending cylinders on the disk to be copied until "Minimum Size" turns red... Then increase the number of ending cylinders until the Minimum Size turns white again...
2. DON'T SAVE. Select the disk and press Z to dump the partition to a file named "PART_DMP" in the same directory as PART.EXE.
3. Use this file as your boot image in Nero and use Harddisk emulation.