Well after buggerising around with it , the only way I could get windows 98 booted to a desktop of any form on xbox was to start in safe mode by hitting F8 as quemu loads up win98.
I did edit the 98.sh file and set it 24 (only cause m.e said he had probs 32) and it does boot in safe mode fine. Will test differant settings for that a bit later
Alot of the problem stems from the graphics driver that is implemented on booting to the desktop. Tried the Cyrus Logic and Standard VGA and a few others , no success after reboot to desktop , the good ol' BSD with fatal error.
Another problem is the Primary IDE Controller (dual fifo) doesnt load or is non existant to win98 , this problem I had in qemu while on my PC as well as the graphics problem. I could still boot out of safe mode on the PC in qemu , but with warnings about incorrect settings or driver errors for graphics.
Because the Primary IDE controller doesnt load correctly win98 runs in compatability mode even when not in safe mode , which means slow access to HD data.
Another thing that's not helping much either is I'm using a v1.6 softmodded xbox , dang that excalibur video chip and it's unnatral overscan issues. Will try it on a conexant chip a bit later. My 1.1 xbox ran XDSL perfect fit on the screen without screwing with correct overscan and it ran 800x600 fine as well. But that gimpy xcalibur v1.6 xbox won't have a part of 800x600 or even trying to correct overscan at any res.
I was curious though , when qemu runs does it use actual physical ram or does it use xdsl swapfile when it's out of physical ram? maybe a stupid question but it's the differance between giving your emulated OS a bit more room to play (slowly) or just crashing and burning when you throw to much at it.
I also managed to get WinXP Tablet to boot up in qemu on PC, Had to do the Image as 1700MB otherwise it wouldn't install and I set the ram to 256.
But boot up was like for ever , but at least the first thing that shows up in XP Tablet is a Virtual Keyboard

Must admit it looks alot better then win 98 and no fatal errors either , but no chance of that running on xbox even if it was stripped. It's just as much a mem hog as XP Pro.
ahh well back to toying around with it for a bit.