It depends somewhat on how far you want to go with the T5 theme.
You can swap the T5 motor into your 98 and put in an M56 transmission to make it FWD plus pedals, shifter assembly etc. Get a T5 M ECU or have your AWD auto one reflashed to a 450 or 608 ECU with or without additional tuning. From there you would get the steering rack for a FWD, drop the angle gear and prop shaft, and voila - FWD T5.
If you wanted to take it further I suppose you could get rid of the Rear Differential, VC etc. and completely change the suspension to the non-nivomat setup but unless you had a donor car with everything this seems very cost-ineffective given the amount of stuff that's different in the rear suspension.
I think I've got that right.
You could just convert your AWD to a manual and keep the AWD. You can still use a T5 motor if you wanted although there are advantages to the LPT motor with proper tuning and better rods.