The XDR file type is primarily associated with 'BizTalk' by Microsoft Corporation. An XML Schema dialect proposed by Microsoft and submitted to the World Wide Web Consortium (W3C) in 1998. Like XML-Data, XDR is a syntax for Extensible Markup Language (XML) schemas that define the characteristics of an XML document. XDR is a subset of XML-Data. You can create an XSD schema from an XDR schema with a conversion script.
FAT32 issues and problems -
By default windows systems can only format a drive up to 32 GB. Additional software works around this issue. When formatted at these bigger sizes, FAT32 becomes increasingly inefficient.
The maximum file size on a FAT32 formatted drive is around 4 GB. With DVD and high resolution DVD formats now available, this limit is commonly reached.
Dealing with fragmentation and free disk space calculations can become painfully resource intensive in large FAT32 systems.
A FAT32 directory can have 65,536 directory entries. Each file or subdirectory can take up multiple entries; therefore, FAT32 directories are limited with how many files it can hold.
fresh install and no filesystem, XP absolutely will not let me format the C: drive with fat32. only ntfs. So the first partition I believe has to be fat32.
http://www.tomshardware.com/forum/9704-45-install-ntfs-fat32
above thread has a lot of info on formatting, I have only ever had xp, so I am not much help with 98se, but I will try to find out answers to your questions
https://www.google.com/#q=format+on+xp+only+gives+fat+and+ntfs+options+I+want+fat32
above link is google search page for formatting in fat32, again you want to read several.
from one of the threads in the link, if you delete the partition and recreate it but do not format, then you will have an option.
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http://www.computing.net/answers/windows-95/making-a-98-boot-cd/164760.html
above thread is dated, but may help except you want to use Imgburn
http://imgburn.com/index.php?act=download
1. copy your 98se disk to your desktop (create a folder)
2. use imgburn to make an ISO image of this folder
3. have imgburn make a bootable cd from the ISO image
is your 98 disk an upgrade disk or a full install disk???