If the drive is a DVD READER, it's not capable of recognising a blank media, for that, you need a DVD-R or DVD-RW drive.
It's prety strange that your drive CAN read a DVD but CAN'T read a CD. Normaly, it's the other way around. It may be caused by some problem with the frimware of the drive, a faulty interface on the motherboard of the computer, bad BIOS settings or bad drivers.
To correct the first, you need a new drive.
For the seccond, you need a new controller. Some adaptor cards exists, or you need to change the motherboard. This means almost getting a new computer.
For the BIOS settings, you can check it by opening the BIOS settings as you boot the computer.
The status of the drivers can be verified, and corrected if needed, from the System applet from the controll pannel.
Electro, June 2011