The problem is with XP, you need to go into "my computer", right click your cd writer and go to properties. Click the last tab which I think is called "recording" and about halfway down uncheck the box which says "enable". I can't remember if there is an "apply" button....if there is click that to store the change, then reboot your computer and try using Nero again hopefully that should your problem out.
If its an OEM copy of Nero it will do everything except BURN. When I changed my Sony drive for a TDK every time I tried toi burn with Nero 5.5 I got a message saying "Contact NERO - this OEM copy will only work with the drive it was bundled with". Updating Nero does not have any effect. It will NOT burn with this new drive I fitted.