OK, I tried it. It worked. Here's the story...I have a 20gb hard disk with a ~2gb partition for Win98se, 2nd partition of ~17gb. First I installed Flight Sim 98 the normal way, then created a directory named Fltsim98 (same name as the CD, although I'm not sure if that matters). Copied each folder from the CD into the hard disk directory. Ended up with 76.4mb for the standard installation directory and 475mb for the Fltsim98 directory (it's a newly built computer, my first, so I don't care it takes a lot of space...I still have 2/3 of the 17gb left).
I did the same kind of registry edit you said to do for the Win98 install disks...changed all occurrences referring to the CD to point to the Fltsim98 directory on my D: drive.
Launched it, everything seemed fine except the scenery...so I opened the Scenery Library, clicked on Files, and got the Scenery Areas dialog. Then I just selected each area, clicked the Edit button, and pointed them at the Fltsim98 directory.
Got out of all that and restarted Flight Sim...it was mega-faster...that ol' "reading scenery files" window just blinks now instead of sitting there while the CD hums and mutters. Only thing I noticed wrong was that when I changed the view to Spot Plane, the Lear jet had the Cessna engine sound...
So I shut it down, restarted my box, and now it works perfectly. No more stalling while it loads new scenery. And no CD in the drive either.
Now I have to figure out how to get my wife to let me buy the latest Flight Sim... 
Oh, and by the way, your "How to Install the ePoX 8KHA motherboard" article was a great "handholder" for this 1st-time builder. I bought everything online...and it all worked almost the first time (I got a C1 diagnostic, looked on your forum, found a post from someone with the same board, same error, and took your advice...changed the memory from slot 1 to slot 2. Works great.)
Thanks!
