I would say this looks like a network (Layer 3/4) Issue. If you can't ping you XP box, then either you packets are filtered or they get lost on the network. Try to connect from Win98 to teh XP boxon port 135 (one of the Netbios port) with telnet. LIke: telnet IP 135

If this connects then at least you have layer 3/4 connectifity to the box. Then start looking at Netbios or Windows settings.