No, DVD drives were usable on even the earliest BIOS versions, but it can't hurt to update to the latest in case the DVD drives are using code the older BIOS can't handle. I have done this many times with DVD drives from older Latitude laptops.  I have done this in both 28x0 and 26x0 machines.  Be sure your cable connection is solid to the drive. You might also try clearing the NVRAM using the jumpers on the motherboard (move jumper to NVRAM_CLR, power on to BIOS, power off, replace jumper, power on normally).  Be sure to re-enable RAID after clearing the NVRAM.
Throwing away old Toshiba laptops, I pulled out their slimline DVD-RWs, thinking I might use them in a couple of older PE2850s that I have.  So, I pulled the CD-ROM out of a PE2850, replaced the CD in the carrier with a DVD-RW, and slid it into place.  On boot, the BIOS told me "CD-ROM drive 0 not found."  I tried a second DVD-RW, same result. Do I have to only use optical drives provided by Dell?  The things seem pretty interchangable to me.  Or is there some firmware update required for the server to use a DVD?  
Replace CD with DVD, PE2850, drive not found