Restart your computer, press and hold down the CTRL key until the Windows 98 Startup menu appears, and then choose Command Prompt Only from the Startup menu.

Insert a blank, formatted floppy disk into drive A.

From the C:\> prompt type the following and press enter after each command.

cd %winbootdir%\command
smartdrv.exe
bootdisk a:

Typically the %winbootdir% will be C:\Windows so you could use

cd windows\command
smarttdrv.exe
bootdisk a:

Bootdisk.bat will format a floppy disk and create a bootdisk for you.

Notices: Smartdrv.exe is not required to create a Windows 98 Startup disk. It is used only to speed the creation of the startup disk. This tip has not been tried by me in any Windows version newer than Win98SE.