If anything, there should be hardware that runs under WinXP that it not recognized by Win98 because of how new that hardware is. I think the fact the system works with 98 but fails under XP is the strangest part.
As Ron lists, there are definite advantages to building your own. There are also advantages to purchasing a computer from a company. The main advantage is you call one place for all the hardware in the computer. The second most important, in my mind at least, is that all the hardware has the same warranty (unless you add something to the system later).
Whether you build your own or buy from a company the choice is, in the end, entirely up to you and your preferences. Myself, I like to know exactly what components are used, so I build my own, but there are definitely times were I see advange is having a company like Dell do the building for me.
Larry
Dell Customer Advocate