XP has *no* issues with reading win98 floppies...
one of the drives has misaligned heads...
more than likely the older machine, presumably the one with win98 on it
It's got nothing to do with WinXP or Win98. What you've got here is a floppy
that's gone bad through misrecording, mishandling, or whatever. If the disk
can be read on *any* machine get the data off it onto that machine and then
try transferring the data using a method *other than* a floppy disk. (USB
pen drive, CD, email, network, install the hard disk in another machine as a
slave...)