You need to go through that Microsoft Knowledge Base article point-by-point. If you need help here, you need to provide all of the data that was requested (and possibly even more). If we start taking pot-shots at the problem based on the information we have so far we could exchange a lot of messages without getting to the bottom of your problem. The MSKB article, if you follow it very carefully through every step, should help you find the cause of the compatibility mode problem.
I can see from your CONFIG.SYS and AUTOEXEC.BAT file that you are loading a real mode driver for a CD-ROM drive. I suspect that you don't need that driver to be loaded. You can place "REM " (That's REM and a space character, but without the quotes.) at the beginning of this line in your CONFIG.SYS file
DEVICE=C:\CDROM\SSCDROM.SYS /D:MSCD001 /PIO
so that it reads
REM DEVICE=C:\CDROM\SSCDROM.SYS /D:MSCD001 /PIO
and at the beginning of this line in your AUTOEXEC.BAT file
C:\WINDOWS\COMMAND\MSCDEX /D:MSCD001
so that it reads
REM C:\WINDOWS\COMMAND\MSCDEX /D:MSCD001
and then reboot the system to see if your CD-ROM drive still works. If it does, then you should leave those lines REMmed out. (You might need to restore them if you need to boot to "true DOS" and still have access to the CD-ROM drive.)
But go through that MSKB article, and check your Device Manager. There are a LOT of possible causes for this, but following the procedure in that article will allow you to narrow it down to the actual culprit.
- Collin