I'm afraid you won't be able to do it without re-installing the OS unless you buy this program that will do it, caled Partition Magic which makes the job alot easier, though its not free.
WHAT YOU DO WITHOUT IT:
What you'd have to do without it, is to format the drive, and go back to the Windows XP setup, setting up two partitions there, seperating them maybe in half and installing XP on one since i'm afraid the way you'd have it set up now is using the whole entire drive for the Windows XP drive and so, this can't be taken back to install Windows 98 on.
You'd then use a bootdisk to start the Windows 98 stup and choose the second partition Windows XP setup created but has nothing installed to it yet.
You'd then have two setups when you started up to select from if its all been done correctly since they'l be two boot records on the drive to start.
As for this, "If the drives for the graphics etc are installed with XP I assume that the win 98 partition will use them no problem?".
No, because since you have two partitions, these are compeltly seperate from one another, so it'd be like having two hard drives apart from one another. You'd just simply have to install the same driver on both.
I hope this helps