yes

but you don't want to do that. Win98 first edition is the most stable OS ever released by Microsoft. SE is just adding some additional features like support for some video editing / acquisition cards. You dont need to install Win SE to enable the functions, if you have the SE CD, you can load the additional drivers, if necessary, off that CD without bothering with the extra 200 MB of junk installs.

The story about upgrading is like this:
If you already have one version of Windows running, you won't be able to install another OS because it'll check and tell you that there is already a copy of W98 installed. You can still go ahead and boot into DOS and delete the Windows directory... DUH, what you gain is just some obsolete files that you don't really want to use anyway.

trust me, you are better off with a fresh install. Just for pointers, you might want to read this: