First, that was a nice, clear post. Makes it easier to answer.
Is C your only primary partition?
I would leave W98SE on C (just in case you run into problems, you'll still have an O/S), move everything on E elsewhere, reformat E (FAT32) to wipe it clean (not necessary but can't hurt), then send WXP to your E drive and have it convert/format that partition as NTFS during the install.
WXP will automatically set up a dual-boot for you (very easy to use).
I always like my C: to be FAT32, so that I can access it from DOS (which many disk utilities use). DOS can't read/see NTFS.
The only problem you'll run into is that W98 won't be able to see/access E, and, when you're in W98, it will see your F as E (cuz it won't see E).
Create a back-up image (Ghost) of C b4 doing anything, in case you do something stupid, such as reformat C by mistake.
WXP will be able to see everything (both NTFS + FAT32).
Read the section labeled 'NTFS' at the bottom of this page:
http://ghost.radified.com/ghost_caveat.htm
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