Some useful advice has been given here by the members.
By way of suggested diagnostics, it has been demonstrated that the drive seems unable to boot from a CD.
Requests for confirmation that the drive shows up in the BIOS or in the Windows Disk management console, or if it had a valid drive letter assigned have been left unanswered by the OP.
One suggestion that a firmware upgrade may be able to revive the drive has been commented on thus:
I'm thinking the coincidence with windows 7 being installed is too great for it not to be a firmware/software issue.
I am not clear what the OP means by that statement, or if any attempt to discover if there is any F/W U/G available has been made.
If the 3-y-old HP laptop model, and the model of the installed, but inoperable CD/DVD drive is supplied here by the OP, perhaps the source of any available F/W upgrade may be located by helpful and knowledgeable members.
However, if responding members are to be berated for offering suggestions that the OP finds unpalatable, and seems to be in denial of, then perhaps some other forum would suit the OP better.
The majority consensus here would appear to be that the drive is no longer viable, with a replacement being the likely remedy.