this question is asked often, simply load the setup files (XP) and when the computer attemtps it's first restart, hold the power button to prevent it from restarting, once this is completed, remove the drive and place back in the original laptop. This should ensure the correct hardware is loaded on your OS.
98 requires a boot disk but should have the same general setup.
An external cd drive can only work if your motherboard/bios supports booting from a usb device, you can check this in your bios by looking at the boot order, if usb is not in the list, then this is not an option.
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