I tried to install Win 98 from an ISO image, but everytime I run the VM machine I receive the message: No boot device available - press enter to continue".. I also tried to install Win 95 from the original cd but got the same message. PS If I try to double click the setup.exe the Mac asks for the right application to open the file...
Your disk more than likely isn't bootable, I don't think the 98 installs were. There is another thread about a half page down from this one. Look for it, good details in there.... title of the thread is " Installing Windows 98 SE"