To boot or not to boot from external usb cdrom drive

This is a challenge;
I am trying to dual boot (Windows 98 & XP) a Panasonic Toughbook CF-M34 which has no internal floppy or cdrom/dvd drives. I can get the usb floppy to be recognized but, when I try to install the dvd/rewriter all appears to go well with no errors but, the drive just doesn't get recognized. It does in another laptop so I would think the drive works okay. It has been used by others as well but, on this Toughbook it is proving to be a pest to get going.
I need it to work to install drivers from the Windows 98 cd - typical.
Any ideas would be welcomed.
I have managed to swap the hard drive into another laptop and install both operating systems but, when I put the drive back into the Toughbook other drivers are needed to get it working properly and XP has problems with supposed virtual device drivers and will not boot. I can only boot 98.
I can transfer files using the usb floppy but, this would take 10 hours if I tried to get all files transferred from the 98 install cd - doh!!