You can mount all type of formats, iso, bin, cue (to have cdda working in games),  pure "mount c c" will mount to C:/ your "c" directory in dosbox, you can create hardfiles too, etc.

I for myself easily install win95ocr2 : http://kas1e.mikendezign.com/aos4/dosbox/dosbox_win95.jpg

But authors of DosBox saying that while win95/98 runs, they will have bugs and issues, because DOSBox is not for windows emulation, but for games. And i can confirm that while win95 works, it may bring all kind of weird things, so it only for fun that you can run win95/98 on amigaos4 in fullspeed, but nothing else like DirectX (which need it for normal win9x games) will work.