Boot with your Win98 Bootdisk, run fdisk, answer "y" to the first question, delete all your partitions and create a new one using all the disk space. Answering yes to the first question enables fdisk to create a fat32 partition of more than 2gig. Make sure that your partition is "activated" within fdisk. Reboot your system with your bootdisk and format c:.
You now have only one fat32 partition.
Hope that helps.