I can think of a few possiblities:
1. You have the jumper set for "Cable Select" and you have another drive on the same IDE channel that is conflicting with it.
Is your optical drive on the same IDE channel as your hard drive?
If so, are both drives set for "Cable Select?" If so, do you have them in the right positions so your hard drive is the master?
Even if you have them set correctly, I have seen some hard drives conflict and optical drives that do not work well using Cable Select. You can check by setting the jumpers to Master and Slave on the two drives.
Regardless of whether this is the problem, you will get faster transfers between drives if you put the drives on separate IDE channels.
2. Your IDE cable failed. Try replacing it.
3. Try deleting the drive from Device Manager and rebooting. Your system should recognize the drive as new hardware and install it again.
4. The possiblitiy of the "duh" factor. Did you check with another CD to see if you just had an unreadable disk in the optical drive?
Good luck.
