Post the kprobe scan of the burn after you defragged. It is important to have a defragged HDD before burning an image to HDD. That is because the image burnt to a fragged HDD with be a fragged image and could have problems burning to disc. That is why it is recommended to have 5+GB continuous free HDD space for your images. Images transfer much more smoothly in both directions with free, continuous space.
Also if you can, save and post the nero burn log after removing your name and serial number from the top of the error log.
With your system specs(1.0Gh Duron, 384MB RAM) I would also recommend not doing anything on your system during a burn at least during the troubleshooting period. You may find you are not able to do anything else during a burn, ever.
I would recommend getting a decent completed burn before you start switching firmwares as I don't feel firmware is your biggest problem right now, and switching firmwares may just complicate the troubleshooting process.