• Softwares needed: VFD(Virtual Floppy Drive), winb98se.IMA (boot98se.zip) and HP USB Disk Storage Format Tool. A quick Google search makes this all available.
  

• Get a 1/2/4 GB USB Mass Storage device.

• Ensure that "Hidden Files" and "Protected Operating System Files" are set to "Visible" in the "Folder Options".
  

This is a two step process:

Step 1: Creating a Virtual Floppy Drive

• Download the vfd21-080206.zip from http://sourceforge.net/projects/vfd/. Extract it.

• Download boot98se.zip from http://search.4shared-china.com/q/lastmonth/040/BOOT98SE and extract it to get winb98se.IMA.
  

• Run “vfdwin.exe” as administrator to install and start the Virtual Floppy driver.

• Click on Open/Create. When prompted for Image File, Browse to “boot98se\winb98se.IMA” and click “Open”.
  

• Again click “Open” in “Open Virtual Floppy Image” window.

• Note the “Drive Letter” in “VFD Control Panel” window. Say for Example B:

• If “Drive Letter” is not set, set it to A:,B: etc. from the options in the drop-down menu.

Step 2: Making the USB Flash Drive as bootable

• Install “SP27608-2.1.8.exe” program (HP USB Disk Storage format Tool). Select your USB stick from the “Volume Label” option.

• Check the box saying “Create a DOS startup disk”. When prompted for DOS system files, Browse to the Virtual Floppy Drive (B: for Ex.). Click “Start”.

• After Format is done, copy all files from “(C:\WINCE600\PLATFORM\CEPC\SRC\BOOTLOADER\DOS\BOOTDISK” to USB stick.

• Copy HIMEM.sys file, into the USB disk from the virtual floppy drive.

• Copy the NK.bin file to the USB disk.
• Boot the CEPC. It should come up!!