Jaz 1 or 2 Gb removeable hard drives from Iomega are quite decent, and they are SCSI so there is a decent perfromance benefit.

Why not try VMWARE? You could install both W98 and Linux on your desktop, and switch between them dynamically. This means you could (in w98 space) share your drives to M$ clients, and (in Linux space) use the OS for your own purposes on other partitions, etc. It has the benefit of being relatively cheap, but you do need a punchy processor and a bucket of fast RAM to make it work seamlessly.