This is due to the old Nero version. Ahead wanted to force the users to buy more recent versions. If you don't want to spend additional money, you can create just image files (.NRG or .ISO) and burn these with ImgBurn (freeware).
Another question I have, which might be related to this problem, is that after installing this drive, I now see 2 new drives, instead of one:
NEC DVDRW ND-3550A and
AXV CD/DVD-ROM SCSI CdRom Device.
The latter seems to be a virtual CD/DVD-drive created by Daemon Tools or similar software.
I am thinking about flashing the drive but not sure if that would solve this problem.
A firmware update will not solve these problems.