I think LadyBug's right:

Hey, it sounds like your booting off ur HD instead of cdrom...
I am assuming, you formatted your computer using format c: /s (to give you the system files). With these files, your computer will boot, but only to a bare MS-DOS prompt (all you have is command.com, io.sys and msdos.sys). Either set your BIOS to boot off of the CD-ROM drive (to install Windows 98 directly from the CD) or insert a Windows 98 boot disk, boot off of that, and install Windows 98 that way. Good luck.

AJ