I know lot of my friends had this problem but I never put focus into this until my wife asked me to inslall for her. I thought that she was also doing some mistake and I can do it, unfortunately I got the same issue. There I started to put my brain to work. First I copied all the contents from CD to System and try to add the Windows 2000 to os, but that didn’t help me. Then I followed the following steps. Believe me the process was very simple.

1. First install the 7.5 SU on the Windows 98 machine.
2. Copy all the file structure to a CD.
3. Copy the entire folder from CD to Windows 2000 Machine.
4. Go to PS_HOME - > bin/client/winx86 and double click on pscfg.exe file. This will opens your configuration manager.
5. Set your configuration manager as it is like in Windows 98 machine.
6. Go to configuration manager Client Setup and choose the options you needed. (Must select ODBC and Install workstation options).
7. Now go to Propgrams and open Application Designer or PeopleTools.
Ooops this isn’t working !!!!!! You are getting the following error !!!
Invalid or Missing …PSSBS (0,0).
8. Now close the application designer and do the following.
9. Click Programs - > PeopleSoft 7.5 -> Righ click on Application Designer icon and add c:\FDm75SU\SQLBASE (this may be a different folder for you) and click OK.
10. Now open your Application Designer and you should be all set.