Edit: I had intented to post this in the hardware section, move accordingly if desired, my bad

Update: Thank you Brianna for moving this thread to the correct forum.
Seems like my BIOS did boot the empty drive, but the screen goes by so fast I didn't notice it. I was looking into creating a bootdisk that has USB support but I had to customize some files also the information I did find was very limited. So, I gave up on that and just went for the easy solution and just connected the HD directly to my IDE cable this way I was able to install Windows 98 easily. Reconnecting the HD to the USB setup I'm able to boot Windows 98 but after loading for a few minutes it comes up with some sort of IOS error or something (I'll write down, translate and post the full error later on) complaining about either not having enough memory or something being damaged (it's not damaged since if I plug it in the IDE cable it boots normally). Never knew how much of a hassle it was to install an OS on a USB device.
Anyhow I may just replace the second IDE hard drive with this one, but I'm not sure how I'd boot from this second drive since my BIOS only gives me the option to boot from HDD it doesn't give me an option to choose which HD to boot from. Any ideas on that? My primairy HD has Windows XP installed on it BTW.
@Brianna: Just to make sure, you have to have a bootable medium in your USB-CD ROM otherwise the BIOS will skip it. Assuming it does, you can't really install USB support in the BIOS, but you should "in theory" be able to make a boot disk that does support your USB-CD ROM, so you can use it to install an OS for example. Just don't ask me how, it's apparently extremely fidgety about what does and does not work depending on your hardware.
@Quaker: Thanks for the suggestion Windows XP on USB has it's own problems though. Regardlessly, I'm only intrested in installing Windows 98 as a secondary OS, since my primairy OS is already Windows XP. The reason I want to install Windows 98 is because I really like to play old games which don't run properly on Windows XP. I've tried VirtualPC but it ran pretty slow and didn't seem to run games properly either.
Thank for the suggestions, appreciate it though.