Hmm, strange setup, so this is a single P-ATA/S-ATA drive connected to a PCI Raid controller? Can you not use the onboard controllers/ports?
More importantly why is this single partition is a different drive in 98?
Share some more info on the configuration of the OSes, how/where they were installed, etc.

Don't mean to question too much but your setup sounded a bit odd so I got curious.

Cauzomb, this tip might help us understand the problem better:
Boot to a Windows98 Startup floppy or CD, then at the command prompt, see if you can access the same folders or not...

~TL