The computer probably doesn't recognize the CD's format. In most cases, this means that certain files aren't installed in the System Folder, or failed to load at startup. To read audio CDs under System 7.1 and later using the Apple CD software, you need the following files in your Extensions folder:
• Apple CD-ROM
• Audio CD Access
• Foreign File Access

To read certain types of CD-ROMs, you'll need Foreign File Access, as well as some other files. The Foreign File Access extension works with any CD-ROM driver. Other files you may need include Audio CD Access, ISO 9660 File Access, High Sierra File Access, and Photo CD Access.

In most cases, reinstalling the CD-ROM software will cure the problem. Make sure the necessary files haven't been disabled by a startup (extensions) manager.

No. Apple says you should not format 1.4 MB disks as 800K disks, and notes that media manufacturers do not guarantee the reliability of disks formatted in this manner.

If a 1.4 MB disk is formatted in an 800K drive, it will be unreadable by a 1.4 MB drive. Apple recommends returning the disk to a computer with an 800K disk drive, and copying the data to a properly-formatted disk. Another technique that Apple recommends in emergencies is to put a piece of tape over the extra hole on the disk. That should allow the 1.4 MB drive to read the disk. You should then remove the tape and reformat the disk.

Make sure it is the drive by trying several different (unimportant) floppies. Once you are convinced that it is the drive itself, your best bet is to bring the machine in to have the drive replaced. Yes, there are floppy drive cleaners, and looking inside the little flap door reveals plenty of dust in most cases. Since your drive is already messed up, go ahead and try one of the cleaners. Normally, they do more to destroy the drive than clean it. As tempting as it might be to spray compressed air into the drive, you are all but sentencing it to death by doing so. If you must remove the dust, pick it out piece by piece - again, assuming the drive is already messed up. Dust in the drive doesn't really hurt anything until it gets blown around and lands on something sensitive. The drive itself has some pretty sensitive pieces inside that can be distorted by a good blast of compressed air. Keep the machine covered when not in use to prevent early floppy drive deaths.

Yes, you probably could, but you really shouldn't even be looking around in there. Opening your Macintosh case is similar to not buying insurance on a rental car. You might not have an accident, but when you do, it's gonna cost! (See "How do I install RAM in my machine?" in the Troubleshooting section.) Even if you were able to find an Apple floppy drive, it is not a good idea to try figuring it out. The only way to replace a bad floppy drive on a Macintosh is to have an authorized service provider do it for you. Apple will not sell you a drive by itself. This has much to do with the way a Mac works - together. If you are feeling like an abused computer user because you're not able to swap parts like your PC friends, hang around for a day or two and watch one of those friends try configuring their new PC hardware.

Much of the information contained herein has been extracted from Elliotte M. Harold's incredible FAQ lists. We thank and commend him for his invaluable service to the Macintosh world.