XP Pro or Home? I've had a few rare instances where the I/O mode on CD drives in Pro can get set wrong during the install due to plug and play settings. If you have XP Pro try going to the System icon in the control panel and then open device manager under the hardware tab. Find your CD drive in the device list and right click on it and go to properties. There should be tab for a list of device options there...but depending on the type of drive that may or may not exist...thats the problem here..different vendors produce differing results in the System settings. Anyway if you see settings or properties look for an option for "transfer mode" and see if its set to DMA or PIO..and switch it to one or the other then reboot and try the drive again. If you dont see these options at all then disregard all this as it has no bearing on your hardware at all

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EDIT: Sorry forgot..it's not the cd rom settings its the IDE drive controller settings so disregard the references to your cd/dvd in the system manager and check the advanced tab of the secondary ide controller ...or primary if thats what your cd/dvd is hooked up to. On the advanced tab there should be a setting for dma mode....don't change it if you are skittish about what might happen though..if misconfigured and you have an ide hard drive you could cause the machine to not boot windows.