Mine gives me problems with CD's larger than 80-minute -- won't commence burning them but, just as with yours, they're not coastered.
Again, DVD's write fine, as do the smaller CD-R's and CD-RW's.
Error message is different to yours, though.
It could be media, these drives seem very picky.
I haven't tried a data DVD as yet -- must do so and see what transpires.
You could perhaps try another burn software -- Nero or something like that, but I doubt it'll make any difference (I've tried Nero, DiscJuggler, Alcohol 120% and CloneCD -- all give the same error, which to my mind rules out software.)
Haven't even looked at the drive's bundled software other than the PowerDVD XP player, which won't run on my setup at all, just freezes (this is due to something I've installed -- the copy that came with the Lite-On DVD reader used to work, won't now.)
However, given the error message you're getting, I still tend to think it's a data path problem.
Look very carefully at what's running on your machine, even to the point of starting it as a bare-bones system with everything disabled that the system will run without and then trying a burn.
Also, if you can, try moving the burner to another channel, try it with DMA enabled and disabled, try it as master and slave, try removing it in Device Mangler and let the system find it again (in fact, remove all storage devices except the floppy and restart -- the system will find its own optimum addresses for all, then.).
Also check the ASPI layer -- the Windows default one is a prime suspect when getting read/write errors.
If any of the above cure the problem or give you different errors, let me know.