Combo drive doesn't play CDs

I bought an Acer Travelmate 250 few days back and it has a Lite-on Silm COMBO LSC-24082K DVD/CD-RW combo drive. It can read DVDs just fine but won't read CDs of any type like CDROMs, Audio CD or CD-R. When I pop in a CD then the LED on drive blinks for some time and I hear the drive moving but after that nothing happens. I tried loking in device manager and it says that the device is enabled and working fine. I can click on the drive icon and eject and see properties etc. I thing that I noticed in the properties the file system was shown as unknown which normally is CDFS for CDs. The notebook has Win XP pro on it. Anyone got any idea what could be the problem?
Thanks...

welcome to Windrivers alok

If it is brand new, don't mess with it, you will void your warranty. Did it ever work? Can you use your restore cd to boot with?