The drive may well have had a manufacturer's system recovery partition installed. I have seen FAT12 active, primary partitions created for this purpose by COMPAQ, for example, to handle CMOS software and setup chores.
You reverse things by using a Win98 bootdisk or CD, and use fdisk to remove all existing partitions. Format as normal FAT, and then do the install.
But I caution you that there was a reason the OEM manufacturer reserved that original partition, and you should check carefully that there is driver and upgrade to XP type support for this system.
For an older, 10gb. type of system, it might be wiser to leave it alone under Win98 or whatever.
It will break your heart trying to make it run XP without hours of time, and copious tears.