If nothing's been done, it's probably just failed over time. You can get DVD-Burners for under $40, CD-RWs for about $20 or so... Seeing as you're replacing it, it should be quite easy to swap them out.
A little test you could try, if you want to be sure it's hardware, find some bootable disk. Perhaps a Windows XP disk... Try to boot to that disk using the CD-RW. Perhaps even disconnect the other drive to be sure it's using the correct drive(I've seen a few computers that only use one of the CD-ROMs as a bootable device...)