As long as you get everything from the original Win partition, and make sure that Win is on the first primary partition seen by the system, you should be good to go. As I'm sure you know, Win 9x must be on the first primary partition seen by the system (C:). (Caveat: I don't know if LILO can do some magic to trick Win 9x into booting off another partition. If so, then ignore this post...)
You're removing/rejumpering/or similar the 4 GB drive before attempting to boot the Win on the 40 GB one I trust?
It is a little simpler process using DriveImage or the like because it can save you backup time, but it still takes far longer than it should (IMO). But if you don't have it, I'm sure the Linux tools you have will do the job.
I think if you copied everything, then the "sys d:" wouldn't be required (nor work as you intended if a C: drive is present).
HTH. GL!
Cheers,
Scott.