Yes you can upgrade Windows 98 to Windows 2000. Insert the Windows 2000 installation CD and click "upgrade" when you are presented with the intial options. You should not loose any of your data or affect any of the applications/configurations.
You will probably find that you need to reinstall some hardware drivers, as these will need to be upgraded. The driver files won't be on your system, so look out the CDs which came with the hardware. (Printer, Sound card etc.)
Richard I, September 2003