Sure, why not? If you have a big enough hard drive ... here's what I would do:
1) Go get a copy of XOSL (
http://www.xosl.org) & make a bootable XOSL floppy.
2) Get a scratch hard drive & use Norton Ghost to copy your Win98 partition.
3) Put the scratch drive in as the primary HDD & make sure it's OK!!!!
4) Set aside the scratch drive & zap all partitions off your main hard drive.
5) Set up XOSL on the main drive. Set up two partitions.
6) Use Ghost again to copy the scratch drive to BOTH of the new partitions!!!!
7) Make sure you can boot one of the Windows 98 partitions, then use XOSL to hide that partition.
Upgrade the other partition to XP, then use the XOSL boot floppy again to fix the boot, since XP will rewrite the boot sector.
Voila!
Of course, if anything gets screwed up, you still have that scratch drive with your original 98 ... remember that one?
If you REALLY wanna get fancy you can create 3 partitions & use the 3d & largest as a data partition, with both 98 & XP able to access it.
