Bollocks!
What Bokkerijder says is true. It worked for me just now after several other tries, but the nurse has just come to tell me its late and I must get to bed. I'll make a full report in the morning.
Basically, while you are running Win 95 rename the Windows directory to something useless. Then rename Win.com to something else. Winold.com will do. (You may have to be at the DOS prompt to do this.) Reboot either from a boot floppy and Run D
setup(where D: is your CD-ROM drive) and away you go. Or in your BIOS setup, change the Boot order to put the CD Drive first.
I've just done this on a fresh HD by first installing Win 95 and then installing Win 98 over the top of it. It works - trust me!
More in the morning.