If all you had was a disk image of a Win98 system, then I could see the potential for problems trying to extract the data files from the image when you had moved to a new Vista PC - but as I pointed out, it rather depends on the capability of the software you use to create the image.
And I would certainly anticipate problems attempting to put a Win 98 image on a new PC (and losing the Vista image).
I mentioned previously that you could put a Win 98 disk image on a blank partition on the new PC - assuming you have the ability to resize the partition(s) to achieve this.
Assuming it wasn't the disk that failed and caused the much needed replacement, it might also be possible to install the old disk into the new PC (assuming a spare drive bay and power supply - and indeed an IDE channel) and have access to the files that way.
If ever the safety copy is used it will certainly be used to "load up" my old machine's programs, settings and data onto a new machine with a much newer OS.
Not your programs or settings it won't!
You might be able to transfer a few basic settings (IE favourites, email etc.) from Win98 to XP / Vista but you will need to re-install all programs and re-configure the vast majority of your personal settings.
You may also find that some (a lot?) of programs that work with Win 98 won't work with a 32-bit OS like Vista or XP.
Be prepared for a major undertaking.
SD