Sashijoseph, I'm recovering from exactly the same problem. No amount of fdisk /mbr can possibly fix this problem. To understand what's broken you have to understand a little about how grub works. Grub installls basically what amounts to a jump table in the MBR. The real work of booting up is done by extracting the OS specific boot info stored at the beginning of a partition. You and I, alas, replaced the Win98 boot block with another copy of grub's mbr (a.k.a. stage1).
The good news is that you can boot up Linux. Linux will let you mount your Win98 partition. All you files are there! If you have room save it in a Linux partition. Then you can reformat the windows as a bootable partition, and then (using Linux again) copy all your saved win stuff back into your new win partition.
Lastly, after you've done that you may want to make a copy of your win98 boot block:
dd if=/dev/hda1 of=MBRhda1.bin bs=512 count=1
(Assuming your win partition is hda1)
I believe the file created will be a snapshot of the Win98 boot block. It may help if you ever have to recover your win partition again.
Check out this site for more stuff on grub, mbr, windows, etc.
http://www.geocities.com/thestarman3/asm/mbr/GRUB.htm