You might have two separate problems:
1. Maximum disk size supported directly by 98 < 127 Gig.
2. SATA drives not automatically supported by 98.
In the way of perspective, XP (original) did not support drives > 127 Gig, so you can understand why 98 might be having problems. As mentioned in a previous reply, most disk manufactures offer some sort of overlay software to handle the size issue.
Further in way of perspective, XP (even SP-2) has no native support for SATA drives, so of course, 98 has none either. One needs to hit F6 early in the installation of XP to load SATA drivers. In the case of a clone of XP from an IDE disk to an SATA disk (such as via GHOST), one needs to perform a "repair" installation of XP after the cloning is done. The repair also has the F6 option to install new drivers. 98 has no similar repair feature.
Thus, the best you can hope for is to do a clean install of 98, which should permit installation of the SATA rivers.
However, you first have to find the drivers. They should come with your disk controller (not the disk, but the controller). That is usually on the motherboard or possibly on an add-in PCI card. But, be warned, not all controllers have drivers for all operating systems, and 98 is getting a bit old.