NEW CDRW drives and software are found every week from 10 to 20 dollars. Sell your older drive and cut your loss.
TRY updating NERO from their web site and see if that fixes it.
TRY disabling the XP IMAPI as noted at http://aumha.org/win5/a/xpcd.php
The image recorder issue is simply NERO didn't find a suitable CDRW or that IMAPI is interferring.
I have a Prassi abCD Rewriter Disk and Nero V.5.0 Burning Rom. It worked just fine on My Windows ME. I upgraded to Windows XP and it tells me that I can't install my Prassi abCD because it does not install with WIndows NT and 2000. Now I can't write CD's - also my Nero 5.0 will only come up with an image file. Where to from here? Thanks