What do u think is the reason for this problem? Faulty hardware or faulty firmware?
I think it's a design flaw. Teac W540 also had one when it would not work properly on some maschines with UDMA enabled (this is actually how I got the idea - the symptoms were very similar so I thought if W540 works fine w/o UDMA, then maybe 1712 would).
Anyway, I don't have nForce2, but what I have in my bios is PIO MODE - Auto and UDMA - disabled, in windows device manager I have "UDMA if possible" set. This way my 1712 reads at full speed (48x) and no problems whatsoever.
Try looking more carefully through the bios, maybe you missed the option to disable UDMA.