I am having the same problem with the internal cd drive on my 2010 mac mini: "the disk you inserted is not readable" by this computer". I also tried this on 2 external USB superdrives (1 brand new) that work fine on other macbook pros, with the same result, so it's not a dirty drive error. It won't recognize brand new store bought CDs, or blank CDs, but DVDs, work and play fine. The CDs work fine on the other macbook pros as well. I'm just trying to rip my music to itunes.
The error message prompt is "Ignore" or "eject". If I choose "Ignore", I can open an audio ripper program like "Max", and it can see the CD and rip it without a problem. The problem is that the CD does not show as a device and is not recognized in itunes.
I'm stumped. I've read dozens of people with the issue on external hard drives, and recommendations about cleaning drives, or buying new drives, but this is not my issue, as I know the drives and the CDs work fine with other computers. It has to be some kind of driver or permissions problem, and not a physical issue.