I finally tracked down the problem and it was a DMA/PIO data transfer issue. Having spent all morning removing some programmes and updating drivers I removed the driver for the Secondary IDE channel. On re-booting the computer the CD/DVD drive was reinstalled and seems to be working perfectly again (fingers and all other available parts crossed).

Here's the info from Microsoft.

For repeated DMA errors.

Windows XP will turn off DMA mode for a device after encountering certain errors during data transfer operations. If more that six DMA transfer timeouts occur, Windows will turn off DMA and use only PIO mode on that device.

In this case, the user cannot turn on DMA for this device. The only option for the user who wants to enable DMA mode is to uninstall and reinstall the device.

Windows XP downgrades the Ultra DMA transfer mode after receiving more than six CRC errors. Whenever possible, the operating system will step down one UDMA mode at a time (from UDMA mode 4 to UDMA mode 3, and so on)