I'm not sure if these will work, But anythings worth a shot!
First things first, Check to see if The IDE cable is in correctly, in that the entire plastic strip thingy is perfectly aligned and all the way into the drive and on the motherboard, and that the little red stripe on the IDE cable faces towards the molex Power connector.
Make sure you have the Master, Slave, Cable select thingy set-up correctly.
I've had issues in the past where having it set to cable select allows XP to recognize the drive, but not pick up any media, Putting it onto master or slave solved the problem.
Next lets see if you have DMA enable, goto:
Start
Control Panel
Device Manager
IDE/Atapi Controllers
select the channel the secondary or Primary channel that the drive is located on.
Right click, Goto Properties, Click on the Advanced Settings tab.
And enable DMA.
Also try changing brands on the media you use, Get a DVD drive lens cleaner and give that a run.
Also If none of the above work, try uninstalling the drive in Device manager, Reboot and let Windows pick it up again.
Another thing to try is flashing it back to its original bios image.
Otherwise another user may have a solution, but it looks like a new drive may be in order.