Thank you to all the readers that responded to my query about why my PowerBook 3400 (running Mac OS 8.0 or 8.1) would sometimes freeze immediately after inserting a CD-ROM disc. In brief, the cause of the problem was the Apple Menu Options extension. Further, it only happened if I was online when the CD was inserted. Here's the "long version" of the story:
Readers pointed to avariety of other possible causes: an older version of Dr. Solomon's Anti-Virus Toolkit (check this web page for more details; thanks, Tara Marchand); file-sharing enabled, or a buggy disk driver. None of these causes applied to my case.
It was Dan Cochran who came up with the winning tip. He noted that this freeze only happened to him when he was connected online via a modem PPP connection. The freeze would happen either when trying to mount a CD-ROM disc or when trying to access a previously mounted one. Dan thought that the problem was also related to having Timbuktu active. I was not using Timbuktu, but Dan was right that my freeze only occurred when I was online. I had not made that connection before.
So I used Conflict Catcher to isolate any possible conflicting extension on my Mac. It turned out to be the Mac OS 8 version of Apple Menu Options. There is no doubt about this. To be clear: deleting the AMO Preferences file had no effect. Starting up with just the essential CD-ROM and Open Transport extensions - plus AMO - still produced the problem. Disabling AMO, but leaving all other extensions enabled, eliminated the problem.
The freeze does not occur on my 7500. So the problem appears to be restricted to the 3400 (or perhaps just PowerBooks or perhaps just Macs with internal IDE CD-ROM drives).
Update: Scott Gray confirms the solution: "I've been having the exact same problem on my 3400c/240 and my new G3/MT/266. Disabling AMO solved the problem on both."