Hi MCAN,
I'm sorry, I completely forgot about this website until I got a reminder notice in my e-mail about my 3-year-old post!
Anyway, I ended up getting an external DVD-RW drive. That can read everything fine (alhough it makes a lot of fan noise when I try to play audio CDs with it). My computer that had the problem is a Compaq Presario laptop, and I'm pretty sure it was a mechanical problem with the internal CD drive because it's one of those types where the whole apparatus slides out and gets exposed to the elements. It basically can't read anything anymore.
I wouldn't be able to tell you if the problem you have is mechanical or software related, but it sounds like it could
possibly just be dust on the CD lens or mirror. Sometimes this can be improved by carefully cleaning the lens with alcohol, but
please don't take my word for it. I would recommend asking around some more in related threads or doing some more web searching first. If you have an active service plan from a retailer, they will often clean lenses for free. Sorry I couldn't be of more help. Best of luck in finding a solution to your problem!