I run 98se for games, XP for some work related issues, and two different linux versions...
Sure, it's definitely "do-able". One of my systems is very happily running 98SE, XP, 2K, and three different flavors of Linux. And that box is just a lowly Pentium III 500...
If you have 12 gigs to spare on your existing system you have plenty of room to install and explore linux. Get a copy of Partition Magic...
Given that hard drives are pretty cheap, you might even want to add a second drive to dedicate to Linux. Putting Linux on a second drive will not only let you avoid the possible risks involved in repartitioning your current drive, but will make it less likely that a serious crash/error/corruption in one of the operating systems will hose both installations.
By the way: however you decide to configure the system for dual-booting, it's a good idea to create a separate FAT32-formatted partition to use as shared data storage. Windows cannot natively understand the Linux filesystem formats (ext2, ext3, reiserfs, etc.), but Linux can understand Windows formats. Linux fully supports reading from and writing to FAT/FAT32-formatted partitions; it also fully supports reading from NTFS partitions and has "experimental" support for NTFS writes (full and official NTFS support should not be far away).
By creating a FAT32 data partition, you give yourself a place to store any data that you might want access to regardless of which operating system you are currently booted …