dual boot mandrake 9.1 and win98

I just set up a dual boot system like you're describing. FYI I'm a linux newbie although I've been working with Windows for a while.
If you're looking for a good free partition tool I recommend Partition Resizer (I don't have a link but you can find it on Google) altho' I don't remember if it allows you to create new partitions like Partition Magic does.
When I set up my system I started from started from scratch and installed Mandrake first, using the custom partition option (or words to that effect), then installed Win98 on the FAT partition using the Win98 boot disk and CD. If you go in with a pre-existing Windows install just be careful you pick the blank partition for Mandrake. This part wasn't very intuitive so I had to play around for a while but I finally got it without hosing my Windows partition. Hope this helps.