"Please insert disk into drive" message when disk is in the drive

Hope someone can help. I've been trying to troubleshoot this issue since I discovered it last Friday.  I have a Dell Dimension 3000 Series, Intel Celeron D Processor 320 (2.40 GHz) and 256 K cach.  I also have item number # 313-3011 16X DVD+/- RW Drive, which doesn't seem to be working properly. When I go to Device Manager for my DVD/CD - ROM Drives I have PHILIPS DVD+-RW DVD8631 and it says "This drive is working properly".  I also clicked on Troubleshoot and uninstalled and reinstalled my DVD/CD Rom Drive and it's still not working properly.  I've tested music CDs, software programs, DVD movies, and burning pictures to a CD-R or DVD + R. Anyway, the only thing that works and is being recognized are movies. I put in my kids Disney movie and Dell studio comes up and starts playing the movie. When I try to install any program, listen to a CD or copy pictures to a disk I get this message "Please insert disk into drive" even though the disc is in there.  I've also gone to control panel and I get the same message on my D: drive. I've also gone to Start > run > D: and I still get "Please insert disk into drive".  I don't understand why it plays movies but nothing else is being recognized. I just burned a ton of CDs to my PC 3 weeks ago and it worked fine. Oh, my disk drive information is Maxtor 6Y160P0.