Apologies for the delay in replying. Have you tried cleaning the laser on the optical drive? This may be all thats wrong with it. On the other hand, if you have been using the drive an awful lot, its also possible it may simply be worn out. It seems particularly strange that it won't read shop bought CDs either.
If you want to eliminate it being a driver issue, one way of doing this would be to test it using a generic driver. If you download the 'bootdisk essentials' disk or the win98se boot disk from here to create a bootable floppy :http://freepctech.co.../files010.shtml
If neither of the above two suggestions check out, then go to Sonys website & search for any firmware updates for the drive. Updating the firmware isn't particularly risky & if all else has failed, then you don't have much to lose anyway.
Boot the laptop from this floppy, insert a shop bought CDROM and see if the system can read the CD from the command prompt.