You can format your hard drive in four primary partitions. One of them can be extended partition. You can format that partition in multiple logical drives. Limit for four partitions is because master boot record (MBR) by standard supports four partitions to be created. MBR is located at first sector of hard disc. The problem can be found when you have multiple partitions of different kind. For example some FAT32 and some NTFS ones. If you set up dual booting with Windows 98 and XP and one of primary partitions is NTFS and one is FAT32 formatted and extended partitions is also divided in NTFS and FAT partitions problem can occur. For example you want to delete FAT partition which is located after NTFS on logical disk and restart you machine NTFS partition would be inaccessible.
You can avoid this by using Windows logical disk manager to change local drives information. I do not recommend you to use fdisk when there is windows 98-xp scenario. If you do not have backup of your specific partition to apply to newly created partition then you can use windows data recovery software to back up your data. That software is designed to scan entire disk drive and search for deleted missing or corrupted files folders and partitions. You can use products from Acronis, Norton , Prosoft Engineering and others to perform scanning algorithms trough hard disk to recover your lost files.