My PC has exactly the same simptoms. After inserting a DVD or CD, when closing the drawer, the machine reboots! If I kept the cd inside the drive, it kept rebooting or didn't boot at all.
Also, the machine hanged some times when browsing the net, so I thought it could be some physical error in the HD or the DVD-RW drive (LG), so I looked for fresh drivers for DVD drive. Didn't solve.
Tested the HD on another system, scanned extensively for physical errors and it was fine. Not so bad, I thought.
Also, I connected the DVD-RW trough a USB2IDE adaptor, but the machine keeped rebooting.
I thought at this stage: it's not the ide cable, it's definitly the DVD-RW drive.
Then, I disconnected that drive, as I had a second drive still connected (Samsung DVD-Rom), hoping to test it on another machine, just to confirm it's the drive's fault, before I'd buy a new one.
Well, some days after that, the DVD-rom drive started doing the same!
And soon after that, some BSOD's refering to atapi.sys. I googled it and some guys were refering issues with daemon tools. Ok, I uninstalled daemon tools. Didn't solve. The machine keeped rebooting.
Meanwhile, I tested the dvd-rw on another machine and it worked like a charm! WHAT??
Well, I started thinking: if it's not the drive, it could be some problem with the BIOS, or the windows installation, or the power supply, the motherboard or even the PCTV board(Pinacle).
As a precaution, I uninstalled the PCTV board.
Suddenly, the machine couldn't boot properly, not even in secure mode. AHHhhhhhhhhh.
I applied BIOS update wich didn't sove the problem.
Then, I started reinstalling XP (SP2) over the same installation, so I could preserve all the apps.
Couldn't pass the 34 minute hickup, because the machine would hang and bsod'ed. Damn !
Looking at the logs during the installation (nice trick!), I found that it could be leftovers from daemon tools.
Then, after managing to get pass the 34 minutes, the machine bsod'ed at 29.
Somehow, it seemed it was again the drive to hang (now the dvd-rom one).
Tried to copy i386 directory to the HD, but it would hang at some point of the xcopy process, going bsod...
Couldn't do it anymore. I'm going crazy, because there has been weeks doing this, only at night at 1 or 2 a.m. and I needed to sleep properly as I go to work early in the morning.
Some days later, I renamed the old windows sp2 installation directories and started a fresh install, this time with a SP3 CD and just the dvd-rom.
It all went fine and I was thrilled to have the machine up and running in such a good condition.
I installed some drivers and used the DVD-rom, with no problems.
I was getting my sanity back when I decided to test once again the DVD-RW.
BSOD again! Then, I reverted to dvd-rom only, and the machine got the same behaviour than before: reboots when I inserted some dvd/cd.
Well, at this point at least one point is clear: it is not software!
I guess it is the power-supply unit or motherboard, so I have to test it with another PSU to end this.
I'll post back when it is done.