Does the drive read commercially made dvds? Can you play a movie dvd in the drive? If you don’t have a program for playing dvds, try VLC, which can be found here: www.videolan.org
But first, lets try the Microsoft Fix It tool. You can get to the tool by clicking the link in my signature that says [I]Microsoft support for optical drives[/I] Follow the instructions on that page.
I’m not familiar with Magic ISO. Can it extract data from a cd or dvd? You might try the free version of ISOBuster just to see if it can find the files on your data disk. Lets see if the drive can read something that way if the Fix It tool doesn’t solve anything.