In 1998 a conversion of a IRA to a Roth IRA was done in a qualified manner. The 4 year tax option was used to recognize the taxable amount of the conversion. If the owner was over 60 years old in 1998 and no other roth activity has occurred before or after 1998, can the owner receive a distribution of 25% of the original conversion amount in 2001 without any added taxable income or tax charge? Further, if the remaining 75% of the initial conversion amount and past and future earnings remain in the roth account until 2003, will all future distributions under present law and regulations be free of federal taxes?

YES.
Your question was a perfectly worded description of how the Roth works for someone over 59 1/2.

In fact, the remaining 75% may be withdrawn tax- and penalty-free immediately. You must wait until 2003 to receive only the earnings tax-free. The earnings will be penalty-free at anytime.