Hi,
Yes, as said above, Linux can pretty much be installed anywhere. On older PCs you may come up against the 1024 cylinder limit. This is where the bios code on such machines does not accommodate reading cylinders > 1024 and so cannot read a boot sector at such a location. It doesn't mean that you can't access those cylinders at all - only at boot time.
Also, it is not true to say that win98 & win2k have to be on sequential partitions. The way windows operating systems allocate disk letters is based on (i) reading the partition table of each physical disk (ii) determining the partition id of each partition (iii) allocating a drive letter for each primary partition type it recognises on disk1, disk2, disk3, disk4 and then going back to disk1 and allocating letters for each logical partition on disk1, disk2, disk3, disk4.
So, say you had a 4gb win98 partition followed by a 16gb w2k partition. If you had spare space on the w2k partition you could reduce it in size and insert a linux ext2 partition in the middle. Windows would still allocate C: and D: as before because it would just ignore the ext2 partition as unrecognised (i.e. not fat16, fat32, ntfs, unformatted).
When you have multiple operating systems you would need a suitable boot-loader in the master boot record (/dev/hda in linux terminology). This could be lilo or grub from linux (which you can config to load win98 & w2k) or you can also use the w2k/nt boot loader to chain load lilo or grub. If you do it that way you'd install lilo/grub in the linux '/boot' partition and not in /dev/hda .
Hope this helps