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Yeah media should not be an issue.
Sony is good media, if you were buying 100 count sleeves for $10 online I'd question it.
Try this, in the "CDs & DVDs" panel in System Prefs, make sure "Ignore" is not set.
Try booting the machine from the Install CD's.
If booting from them fails I'd say the drive was a lemon.
Gotta go to bed.
Will check in the morning.
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