Sorry but I don't agree with coathi, as FAT32 can be as good as UDF under certain conditions. But I don't want to argue on that as I use both, just your decision derekgale.
About your prob (I hope it is solved by now), it is rather curious you say you could write DVD-RAM before using Nero Express, as this is not supposed to support DVD-RAM.
To my advice, for you to write to DVD-RAM using UDF you should need:
(1) - a package like InCD or similar (packet writting software) and this kind of stuff is said to offer a lot of trouble (in my only XP machine - a notebook) I've Nero Reloaded version 6x and I did not install InCD due to this, therefore if I need to write a DVD-RAM disc (USB 2/firewire external enclosure) I use a FAT32 formatted one, because it has XP natural support;
(2) - a DVD-RAM driver like the one from Panasonic, that allows you to use FAT32 and 3 flavours of UDF (1.5, 2.0 and 2.05(? - not sure about this one)), but conflicts with InCD.
If you don't need to write new data to them, You can continue to use your UDF discs.
On the other end, if you format a disc as FAT32 you can allways re-format it back to UDF at a later stage, so I don't see why you wouldn't try to see if your XP writes to a FAT32 formatted disc.
A possible problem with your sys is that you possibly installed Nero using the "automatic pilot", InCD was also installed and is now having problems that prevents it to write.
You can uninstall all Nero software and install it back, to check if it solves your prob.
But, please check the probs raised by the couple XP/InCD, specially if yours is only XP SP1.