You can alter your startup options by hitting winkey + pause/break to bring up System Properties, then clicking on the Advanced tab.

98 is still there because you've installed XP on a seperate partition. I don't think there's any easy way to get rid of it without doing a clean install of XP by booting with the XP cd. If you have an upgrade version, all you have to do is insert your 98 cd when it asks for confirmation of your upgrade eligability.