When you disable "Simple File Sharing" in the
Tools>Folder Options
Menu option of Windows Explorer, you get back full control of your options. The Security tab appears in the menu that you get when you right click on a Folder or File.
Thus you can reset the Permissions for accessing your Files. But this is a tedious business, which is why "Simple File Sharing" is Recommended.
For instance Microsoft will tell you that on XP machines sharing is not extended to Documents and Settings, Program Files and Windows Folders. But this is not the case if you disable Simple File Sharing and reset the Child Attibutes.
Don't forget that the Win98 machine won't be able to see the XP Folders and Files if they are on an NTFS volume. For total mutual visibility the whole setup has to be the FAT32 file system. But then I suspect you knew that if you had it all working satisfactorily before.