Corrupt Folders on a Dual Boot System

have a dual boot Win98/XP partitioned drive.
The win98 is (c)
The XP is (e)

I also have an additional slaved 250G Harddrive (D) which is Fat32 and holds music/data/backup programs etc which both OS access.

For some reason recently, when I am on the Win98 and I access the D drive some folder contents look like garbage. However If reboot to WinXP it reads it just fine.

I only discovered this after I had to reinstall both OS. I initially reformatted Win98 after I messed it up by using a program for folder colors (meant only for XP) then found I lost my boot record so couldnt boot to XP. (No i didnt realize that the boot record is in c:\ for both).

Also I could not delete the garbage folders in Win98. I could if I booted to XP and thats what I did. I identified them with a _ before the file folder name and then got fresh copies from my DVD backups. I did not replace/or overwrite them. I thought everything was OK.

At one point in rebooting to WinXP it went nuts telling me it had to scan (D) drive then scrolled stuff for a long time. It seemed to be some File Allocation issue which at the end said it was fixed.

However after finally finishing installing everything with WinXP and moving back to Win98 to finish installing the programs there, I found again a few "corrupted" files. Not all the same ones again but different ones and not so many as before

WHAT can cause this? File allocation?
If so would not have WinXP caught this again?
What would have caused this initially?