Image, clone & flash drive partitioning

I have win98SE on an older ThinkPad - 96MB + 4GB HDD, partitioned
equally in C: & D:. Everything is running great and doing the job I
want it to do. I want to be able to recreate the OS installation
should something go wrong, like the HDD dies, or I screw something up
while fiddling around.

I have an empty 4GB Flash drive, Acronis 7.0, Partition Magic and
Norton Ghost.

I would like to partition the Flash drive into 2 equal sized
partitions, then create a clone of the ThinkPad's C: partition, which
has 98SE installed, on one of the Flash drive's partitions, then
create an image of the ThinkPad's C: drive on the other Flash
partition. My rationel being that I would use the clone to load a
working 98SE on a new HDD, and use the image as a backup that I would
use to refresh SE, should it get screwed up on the current HDD. I
would preiodically do incremental backups of that image file.

My questions and additional info:

1. Can I partion the Flash Drive using Partion Magic on 98SE? If not
Partion Magic, any other suggestions? I do have a machine running XP
Pro, but I have read that XP puts some proprietary XP files in each
partion, if I used it to do the partioning, that would be a problem
for SE.

2. Can Acronis 7.0 (or Ghost) create a clone on a Flash drive? If so,
could I use that file to load a new HDD with a working 98SE? If
unable to do this from a Flash drive, could I copy that file from the
Flash drive to a CD or DVD and then use it to load a working 98SE to a
new HDD? Also, If not Acronis or Ghost, any other suggestions?

3. Can Acronis 7.0 (or Ghost) create an image of C: on the Flash
drive? Could and should I do incremental backups to the image on the
Flash drive, or should I just create a new image each time?

I realize some (or all) of this has been covered in previous posts and
responses, but I have not been able to assemble all the info available
into a cogent play for my situation. I trust you will all give me a
little slack, or not.

Thanks.