I was given an HP laptop with a DVD drive that lights up when the eject button is pushed but is not picked up as a drive in My Computer and fails to load when a disc is inserted. It says the drivers are installed but it does not find the drive itself. It is getting power I assume since the light comes on but I can't figure out how to get the computer to recognize it.
You could click (in XP) Start/Control Panel/System/Hardware/Device Manager, and select DVD/CD Drive. See if your drive is shown, and if so, delete it. Shut down and reboot and the computer will search the system to reinstall the drive. It worked for me when I had a similar problem.