I would not use partition magic, if you have a windows 98 or windows 98SE cd then put it into your cdrom drive and reboot your pc, your computer should boot off the windows 98 cd you have just put in your drive.

You will get a few options something like:
"Setup Windows 98" - Don't Choose This
"Start With Cdrom Support"
"Start with no Cdrom Support"

Choose the CDROM Support option, now once u get to the command line ie when it shows:
"A:\"

type this: "cd E:\Win98" now hit enter, the bit that said "A:\" should now read:
"E:\Win98" now type this: "fdisk" hit enter

First screen that appears, press "Y" for yes and you are provided with a set of options on screen, goto the "delete option".. and delete your "C Drive" partition, now once u have completed that. Reboot, and do the same thing upto the point where you are in "FDISK utility" again.. now use the "create new partition" option.. and create a new C drive..

Now reboot goto the "E:\Win98" prompt as i have explained above, and type: "Format C:\ /s"

when asked "you will loose all data e.t.c e.t.c" press "Y" for yes, and start formatting.. once the format is complete give the drive a name or leave it blank, and reboot.. now on the option screen again.. Choose "Setup Windows 98" or whatever.. now reinstall windows 98

You should still have your D drive once windows is reinstalled