Heck, I remember buying a 2nd-hand 100 MB hard disk for the incredibly cheap price of 100 guilders, about 50 us$ at the time - 4 months later new ones were cheaper :dead:
Anyways, it's a weird problem you've got there... but then computers can do weird stuff even without adding hardware... :laugh:
What I always try as a last resort before buying replacements is disconnecting the drive, start Windows in Safe-Mode (although I must admit I've never needed to do that on XP) and THERE remove the drive from the hardware list - restart in normal mode, make sure it doesn't give any missing device in the hardware list (always check check triple-check :yowch: )
shut down, connect drive, start Windows and the drive should be completely re-installed - if this doesn't help I'd recommend buying a new one, and go for double-layer DVD burner - single-layer DVD burners are only slightly cheaper... :squareeye