It might be easy to get your dvd-drive back by removing UPPERFILTERS and LOWERFILTERS from the registry (widely documented both on this forum and on google hits), but that's only secondary.

Your primary purpose should be to remove that trojan or whatever it is. Please tell all details you know (that's everythoing AVG says about) it and post them in a new thread in our viruses forum (that's where the experts are).
If removal fails, you might have to do a clean install of Windows XP, and that will solve your dvd-problem automatically (unless it's a hardware issue, which isn't impossible).

Kees