Hello and welcome to Bleeping Computer, CrimsonChas.
Partitioning a drive is simply put dividing it into sections. The Primary partition in always the first partition or section. You would divide it up, as you stated, to install a second operating system, or to store data. Here is a link to describe "Disk Partitioning"
. There are several good programs out there that will help you partition your drive. Make sure you leave enough room for 98 to operate. To function properly it will need 15% to 20% free space on the partition.
Example: If 98 is using 18 gbs of space right now you want your 98 partition to be at least 20 gbs. If you plan on using the 98 partition I would recommend adding even more.
There is one more option. If you are planning to move to XP, which I highly recommend, you could create a FAT32 partition and transfer all your data to the second partition. When you have everything you want there, format and install XP on the primary partition, where 98 currently is installed.
I would recommend you use Partition Magic for this project. It is not free but it is straight forward and reliable. Please wait a couple of days to hear from other members before proceeding.