Windows 98 virtual machine installation trouble

Hello,
I am new to the forum and just got Parallels Desktop 9 for my Mac and am excited to use it. I intend to put XP on it which I am sure I will have no trouble with that. However, in the mean time I found and old bootable recovery CD from an old e machines computer I no longer have which ran Windows 98 and I thought that would be an exciting blast from the past. Unfortunately I am having trouble installing my virtual machine. Before I get started, I will say that I do not have much experience with windows 98 as far as setup/recovery/installation, my windows 98 was still running strong on my emachines after all these years when I recycled the computer last year (no, I was not just running windows 98 till a year ago, I got XP when it came out, I just kept my emachines to mess around with). Anyhow, the first computer I had to restore was windows xp, so I'm sure there's things I'm missing here.

First, I'm sure this wont be 100% by the book mainly because I have windows 98 instead of 98 SE which is what parallels calls for. It doesn't say on the disk, but as far as I'm concerned I do not recall my computer having SE on it. But I'm hoping someone has a way around this.

When I install my virtual machine, I select DVD and then Windows 98. It starts to build the virtual machine and I get:

Microsoft Windows 98 Start Up Menu
=======================
1. Restore Windows 98 - Will format HDD
2. Restore Windows 98 - Will not format HDD
3. Boot to DOS Prompt from CD Rom

When I select 1 or 2 it gives me an error and says my computer is not responding then ejects the disk. I can only get the command prompt from the CD (A:\). If memory serves, I can enter a command in the prompt to install 98. I was thinking it was setup.exe, but it just tells me that is bad or invalid. What am I doing wrong here? How can I get windows 98 as a virtual machine here? Any help would be appreciated. Thanks,
Jay

 

When I installed Win98SE I created a DMG of the CD and mounted that. Just remember that they dont support or have any tools for Windows 95/98/NT. Also watch your Virtual HD size, make it too big and you'll have some issues installing.