I'd never do a upgrade/repair...so many problem with it alone, just put the xp disk and install that, you don't need to install (say windows 98) first to install an upgrade. All windows will do is ask you for the original 98 disk and then it will continue to use the xp disk.
The repair installation feature is crap. I used it once and it mess my windows installation even more. Don't use it because you didn't know what is going on behind the process. It might introduce more problem than it fix.