Some steps:
1. Check the version of the BIOS. If you do indeed have an original (V1) IO,
then the version will indicate a date of October, 1999. Turn on the IO and
press the TAB key serveral times as the machine comes up. A V1 will exit the
graphics mode ( "Nothing but Net" ) and show the usual BIOS powerup messages.
The version will be in the lower left hand corner.
If you don't have a V1 BIOS, you will need to obtain one from BadFlash or
somehow re-program you existing BIOS flash chip with the V1 BIOS. This is so
you can boot a hard drive.
2. A hard drive. This should be a notebook hard drive, 2.5 inches wide. The drives
come in different thicknesses. Do not try to use one of the old 17mm thick drives,
12.7mm is the thickest, with a 9.5mm drive being a much better fit. I have several
IOs using 540Mb drives and couple with 810Mb drives. These are available used for
around $30-$35.
You will need a special cable for the drive. The connector in the IO has it's pins
swapped. You will also need to mount your drive in the IO. If you don't mount
your drive inside a cutout of the heatsink, then you will need some way of cooling
the IO's CPU chip since the heatsink has been removed. Try a Lasagna fan from
Tennmax or a Sunon CPU cooler from Allied Electronics or others.
3. I haven't done external sound. You might want to consider some USB speakers.
4. For networking, use a USB to Ethernet adaptor. The D-Link DSB650 is one that I've used.
The LinkSys adaptor also works. Stay away from the Netgear adaptor, it never did work
for me on any of my machines.
5. Software. Lots of small steps here:
Use a 3.5 inch to 2.5 inch hard drive adaptor so your notebook drive can run in a
desktop PC. Install the 2.5 inch drive in the desktop as the only hard drive. The
desktop needs to also have a floppy drive and a CDROM drive.
Boot up a Win98 setup diskette.
Partition your 2.5 hard drive using the FDISK command. Answer "Yes" to all the
questions. You will get one large, FAT32 partition on your drive. Reboot after the
partitioning is completed.
Format the 2.5 hard drive, using ' FORMAT C: '.
After formatting, create a directory on the C: drive, type "C:", then "MD WIN98".
Type 'CD WIN98' to enter the new directory. You then copy the Win98 files from your
CD. If your CD is drive E:, then goto E: and find the Win98 directory, probably setup\win98.
Copy all of the windows setup files (mostly *.cab files) to the C: drive.
Also copy over your network adaptor drivers and the Cyberblade video drivers. Copy over
anything else you might need, like PKUNZIP, etc. Until the IO is on a network, getting
files onto the hard drive once it's in the IO is very difficult.
Once the copy is done, power down the desktop and remove the 2.5 drive. DO NOT BOOT
THIS DRIVE IN THE DESKTOP! Install it in the IO and then boot the IO. Follow the setup
directions. After setup is complete and you've rebooted Windows, the first thing you will
notice is that the sound is not good. The IO only has a primary IDE controller, so you need
to disable the secondary IDE controller that Windows has as a default. Get to the device
manager and disable the secondary IDE controller and reboot.
Once the video is to your liking, plug in the Ethernet adaptor and install it's driver. You
will need to do network setup, assign an IP address if not using DHCP, etc.
I've done 5 IOs, they all work fine running Win98. There are probably some steps that I've missed,
I'm certain others of the " IO Collective " will chime in with advise on where I'm forgetful! 
sod ( "The lunatics are on the grass..." )
