FreeDOS still depends on a number of PC bios services, see their site (e.g. http://fd-doc.sourceforge.net/faq/cgi-bin/...nformation/277)
for a partial list of which it uses. The Xbox has none of these, so you'd have to write a bios that provided them before a FreeDOS port would be possible.
The FreeDOS developers have not yet managed to get Windows to run in 386 Enhanced mode themselves, so expecting someone porting it to the xbox to do it is a rather tricky call.
Booting 98 on top of a partial homebrew pc bios implementation and a port of FreeDOS would be a project for a large number of people for a good year or three, I'd expect. Consumer Windows depends on all kinds of odd behaviour from the int services which would take significant effort to replicate bug-for-bug.
Accessing PCI isn't done via DOS, it's done by Windows mapping the PCI configuration registers into its address space and then writing and reading them directly. There's no way to intercept this without running the entirety of Windows under an emulator/virtualizer; you would have to modify Windows to make its PCI probing safe.
Why won't people believe me that it's easier to port a modern protected mode OS?