Notebook/Laptop reformatting problem...

Ok, I've got a Gateway Solo 1200 notebook/laptop,
and it has XP on it, but I want to completely
reformat the hard drive to put 98se on it.

I go to start, run, and type in "format c:"
then command promp opens up and this is what happens:

_________________________________________________
WARNING, ALL DATA ON NON-REMOVABLE DISk
DRIVE C: WILL BE LOST!
Proceed with Format <Y/N> (I click Y and hit enter)
Verifying 9585M

Format cannot run because the volume is in use by another
process. Format may run if this volume is dismounted first.
ALL OPENED HANDLES TO THIS VOLUME WOULD THEN BE INVALID.
Would you like to force a dismount on this volume? <Y/N> (I hit Y)
Cannot lock the drive. The volume is still in use.
_______________________________________________

How do I get around this?
All I wanna do is reformat the hard drive...

[Uranium-235]

It can't be done in windows cause windows is using it.

If you have a full copy of windows 98 that is bootable, put the CD in and boot from that...then format.

Since it's XP it's probably formatted NTFS. So you'll first need to FDISk and remote the 'Non-dos partition'. Then add a Fat32 partition. Then format, that, then Install 98

Ok, I've got another problem...
When I put ANY CD into the CD drive on the
laptop, it says:

"Windows cannot read from this disk.
This disk might be corrupt, or it is using
a format that is not compatible with Windows"

I put the same CD's into my desktop pc, and
they work just fine...
Both have XP

Can anybody help?