Still on Vista here, so can't really give you any Win7 advice. Only thing that springs to mind is that the game could be looking in the wrong drive. You have any partitions so the default D: for optical drives is further down the line? Then again it would be a fairly common problem if it was that, can't see anything after a google search.
If all else fails you could try creating an image of the disc with Daemon Tools and try to trick it .
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