Windows 7 thinks it is windows 98?

i put the boot disk in and it installs windows 98!! WTF. i paid for windows 7. i know it s not a bad disk because my friend brought her windows 7 disk over and we tried to install it. i have windows xp installed right now. also debian linux. im reaaallly confused. also, windows 98 works flawlessly on my new hardware. whats going on>