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UPGRADE WITH OEM CD. 

There are three types of Windows CDs:  full retail, upgrade and OEM.  The full retail and upgrade versions will either install to a hard drive without a system or upgrade an existing system.  The only difference between the two is when the upgrade version is installed to a clean hard drive, the installation process asks for verification of a previous system.  An OEM CD is a full version designed to be installed on a hard drive without a system--it may contain words on the label to the effect, To be distributed with a new PC.  When you try to install it as an upgrade, you will receive an SU0168 notice:  Your computer already has an operating system installed....  It can happen with W98, W98SE or WinME CDs.   If you received this notice, you may have an OEM version CD; however, there can be another reason for the notice as described in this article:
 
Err Msg: Your Computer Already Has an Operating System... [Q225252]
http://support.microsoft.com/support/kb/articles/q225/2/52.asp

An OEM disk can sometimes be tricked it into upgrading and sometimes it can't.  It appears the disks can contain different safeguards as people I know have tried upgrading and reported failure.  I have been able to upgrade with three CDs:  W98, W98SE and WinME; however, if the upgrade installation works, another problem is the OEM disk may have been customized for installation on a particular computer.  By loading it to another PC, you may totally mess up the existing Windows installation.  If you want to try to upgrade with an OEM CD after knowing the risk, here is what worked for me even though I DO NOT recommend it:

1.  If your PC is dual booted with Windows loaded to other partitions, those partitions must be hidden or you will continue to get the SU0168 notice.

2.  Make a W98 floppy start up disk with the Fat32ebd.exe file located on the W98 CD:  tools/mtsutil/fat32ebd.

3.  If you have Windows Media Player 9 installed, uninstall it or you may receive a SUWIN error (verx.dll) at the 66% point of the file copying.  If it is too late, you can try renaming the wmploc.dll file using the procedure in para 4.   If you have IE5.5 or IE6 installed, I suggest you uninstall it before attempting the upgrade.

4.  You should install the system from DOS--if you need help on this, see the How To article:  W98 RESTORE DISK AND INSTALLATION PROCEDURES.  When you are ready to start, boot with the floppy start up disk and W98 CD inserted.  At the A: prompt, type:  C:    and hit enter.  At the C: prompt, type:  CD Windows     and hit enter.  Rename the win.com and winver.exe files by typing:  ren win.com win.old    and hit enter. Do the same for Winver.exe.  Refer to the installation procedures for the next installation step.

5.  If the OEM version is going to do an upgrade (or an over the top of the existing system) install, you will soon know as installation will either give you the SU0168 notice or ask if you want to install to the directory:  Windows.000   Do not accept the .000 option; instead, install it in the Windows directory.  If you get the SU0168 notice, you will have to format your drive to install the system.