Booting from USB cd-rom "Drivers not found"

I've had a toshiba satellite p15-s479 for a little over a year and a half now, and I have some real problems. First off, about 2 weeks after my warranty expired, my cd drive crashed and no longer works. To replace it, I bought a sony dual layer usb dvd burner. It works perfectly fine.

Now, more recently, my hard drive crashed. I bought a new one online, but it wasn't formatted so I also bought an enclosure that turns it into a USB mass storage device. Now here is my problem:

I set bios up to boot the usb disk drive with my laptop's recovery disk, and it starts to work fine (shows windows 98 loading) and then very quickly it says drivers not found, and goes on to say no cd/net....

Does anyone know what I can do? I've heard of booting from a boot disk with generic cd drivers, but it really is way over my head. My only other option is to possibly download a free distro of linux and install it on the hard drive while it is a USB mass storage device. HELP!!!!