Do you have InCD installed as well? If so, is the disc formatted?
If the answer is yes, then Ithink what is happening is that when the disc is inserted InCD detects it and takes control of it, preventing Nero from doing so.
If this is the case you'll have to stop InCD from running.
I repeat that this is just a guess, as I don't have to do this with version 5.... soapologies if I'm wrong!!