You can't upgrade from a different language version, but you can do a complete clean install. It will mean reinstalling all your applications and backing up your data.
I'm not sure if it will accept your original english Win98 CD as verification, but it should. If not, just borrow one, the important thing is the XP registration code for when it's installed.
You could also put in a second drive and dual install XP on the other drive. Then you would have the choice of selecting the English or German version when you boot your machine.
See
here for tips on how to install.