I have this same problem. I contacted Dell about my system and after 2hrs of talking and unistalling/installing/downloading/shutingdown/restarts we thought the problem is in fact that the disk is not compatible with Windows 7. The disk I have won't work on my system, windows 7, but my brothers system, which is windows vista, is reading the disk as well as my fathers system, windows xp, reads the disk fine.
I don't know what to do to make it compatible, hopefully this will help you understand a possbile problem? If you guys know how to make it compatible please feel free to tell.
