I've checked out a few forums. People mention playing backups, but don't mention mod chips. /shrug I found this on a forum:
to answer your original question, yes the Duo will read CDR, but I find that mine is very picky about what brands it will read. In fact, the only brand I have found that works pefectly is Verbatim datalife plus. More expensive but definatley worth it to protect your investment. Other brands either do not load or skip and jump (increasing loading times or during music playback)
Try making a backup using dvddecrypter and let us know.