It depends on which version of Windows Me you have on
the cd. If it is a windows me UPGRADE then you will need
to install it over the top of the Windows 98.
If it is a windows me FULL VERSION or OEM then it was
made to install on a blank drive.
The upgrade will be easier because all the software
drivers for the video, sound, modem, etc will already
be there. If you have to wipe out 98 and install the
full version then you will also need the drivers for the
video card, sound card, modem, etc or they won't
work correctly.
You will also need the Windows ME product key for
either version.