I tried your method but ran into a problem at the point where you said to:
5) Using a working desktop: Unplug any and all HDD from a system. plug only the Laptop HDD. insert the 98SE bootdisk into the floopy drive on the system.
Choose boot with CD-ROM support.
At the A: prompt type C: and verify all the bootfiles you copied earlier are there.
type A: to get back to A prompt.
type sys C:
Once system is copied. shutdown the box and remove the laptop hdd.

Everything you said ran fine until I typed sys C: and I got the message "Bad command or file name" and that was the only thing that I could get regardless of what I tried. I tried to put the HD back into the laptop and it would not boot from usb floppy (thanx heaps Fujitsu!) using two different drives. My laptop is a Fujitsu B2562 and I have tried all known methods found here and elsewheree on the net to install XP on it. These Fujitsu UMPC units seem to be junk to me if this is what grief they give just installing an operating system. I have two N400c Compaq units that run fine and had a docking base available to get the XP cd into. The Fujitsu may end up being used as a clay pigeon and after that their engineers deserve to be fired for such a poor design. Build quality means nothing without serviceability.