Thanks for your answer.
Well, I did all of these and InCD still makes DVD-R unreadable. And InCD also crashes/disappears in Windows XP (IMAPI services are disabled). I am looking for another UDF reader and writer software.
Getting rid of ME on that laptop is an option I already considered, but XP on it is impossible. Win98SE is not a great idea as well, leaves Win2k which I would have to test. With 192MB ram and just 600Mhz I just fear 2k will be too slow to play xvid/divx movies on it, which is the only use of windoze on the laptop besides playing DVDs and writing CDs sometimes.
I guess I will try to go back to an earlier Nero/InCD version or use Linux for writing only, as it never gave me any problems. While ME may be a POS (I know), it does not appear acceptable to me to do some OS reinstall just to be able to access UDF cds.