Virtual PC emulates an entire computer but without an OS, not a computer and OS like DosBox does.
First, you need to create at least one virtual hard drive. Best idea would be to set it to a fixed size, to avoid any issues.
Then, insert Win98 CD to your CD drive, and make VPC "capture" the drive (there is an option like that in the top menu).
Start up the virtual machine and install Windows like you would on any normal PC.
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