If another computer can read it, have you considered making a copy and trying the copied disk?  If that disk also does not work that would seemingly rule out bad media as the problem. If it does work, you're good to go....
I've reformatted my Dimension 3000, reinstalled Windows XP Pro, all Dell drivers and installed all Windows updates.  I then went to install all the other applications that came with the computer (Sound Blaster, CyberLink PowerDVD, Sonic DigitalMedia), they all installed ok.  But the exception is Microsoft Office Basic 2003.  I inserted it in the drive and the drive is not recognising that there is a CD in it.  Therefore, I cannot install the software.  This is the first time since purchasing the computer in summer 2005 that I have used this CD. Can I get a new CD from Dell?  Is there somewhere online that I can download the version? Thanks!  
Installation CD not working for Microsoft Office Basic 2003