installing win98 (1st ed) on VPC - VPC, XP host crash after instal

Hi the subject wasn't quite long enough

after installing windows 98 (first edition - I get past the initial 640x480
install screen where it copies files - then it needs to reboot - so I do that)
After the first VPC reboot I get a text message about there not being a
valid something or another
After another VPC reboot I get the starting windows for the first time, then
it hangs.
Then my host os crawls to a stop - VPC taking exactly 50% cpu
Other apps on the host seem to crawl to a stop also (task mgr shows them not
responding (but not all apps)
I can't end task on VPC
If I do kill -f virtual pc.exe - the process is still there.
I continue to see some disk activity (the light flashes now and then, but
not like it would be if I were copying a large file)

Help PLEASE!!!

My Physical PC is running XP pro SP2 (2.6GHz, 1 Gig ram)
I installed vpc 2004, and vpc2004sp1
I was able to setup windows 2003 on a virtual PC no problem

I wanted to play with a smaller os so I could understand the VPC undo
discs/various options etc..

So I grabbed my Windows 98 CD (first edition)

I setup a 1 gig fixed drive in VPC.
Mounted the 98 CD in VPC
booted from the CD in vpc
ran Fdisk - enabled large disk support
made partition active
rebooted VPC,
booted from 98 CD - ran setup from 98 CD

If you need more info let me know - I'd do it again to get the exact
sequence of things, but every time I do it hoses my whole Machine - and I
have to hit the reset button