created and formatted this partition in Win XP (coz FreeDOS's format doesn't support FAT32 yet)
FreeDOS FORMAT does support FAT32. I've recently used the latest FORMAT release (0.91r) to create a FAT32 file system so I can confirm it.
you prolly don't want FreeDOS's bootcode to be installed on C: (since you'll have XP bootmanager or Win 98 on your C:) ... so be sure to answer "NO" to that question by the install program, and then manually do a "SYS D:" (or whatever is your drive letter) from the command prompt.
Perhaps the installer can give the user a chance to run SYS on a drive other than C: or at least tell him that he's about to do "SYS C:"?
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