Richard:
1. The link to the InCD manual on Ahead's site
ftp://ftp6.nero.com/manual/InCD_ENG.ZIP
works right now (failed yesterday). The manual hasn't changed since August; i.e., it is outdated. Also to get some (again outdated) info, use Windows Explorer to call up Program Files\ahead\InCD\InCD.hlp and click Index, or anything else that's clickable (doesn't work in normal way).
2. Daiwa is right: cleaning the remnants of other packet-writers might help (but could be difficult unless you track the changes made by each software you install), the drivers for older external
storage devices (Zip, Jaz, etc.) needn't cooperate with InCD, and SCSI is a different world (e.g., apparently EasyWriteReader may cause a crash on 98SE with SCSI devices). However, serious driver conflicts would probably prevent InCD from running at all, which is not your case.
Now a couple of random remarks/suggestions which may or may not help you.
3. I've never checked if underscores are valid in labels; probably yes, but why don't you start without them? Keep it simple.
4. Why not use 10x or 12x media to reduce testing times? I bet Ahead's tests concentrate on faster media nowadays.
5. Maybe Daiwa's double formatting works, but I would try it as a last resort only. If you wish to reformat a disc, for safety first do Nero|Recorder|EraseReWritable|Full Erase.
6. Use the Properties|InCD Page Settings to check that the startup and RW mount messages are displayed.
7. What happens if a formatted disc is in your burner at boot time? Normally the InCD mounted message should appear.
8. What does Nero InfoTool|Configuration say about Autorun for your burner? My burner has Autorun on. Fighting with earlier versions of InCD and EasyWriteReader, I discovered different behaviors for on/off on my CD-RW and DVD-ROM drives, so I'm now using Autorun on for both. BTW, I'm on XP Pro, and there are tons of confusing info on the web about Autorun/Autoplay; if you ever used any registry hacks or group policies, you may have trouble in getting it to work as desired.
Here is a "mini-guide" I sent to another guy; this is for Win XP SP1, InCD 3.51.61, Lite-On LTR-48125W VS08, Autorun on.
Formatting a CD-RW disc in InCD
A. Choose the standard CD-RW format or the CD-MRW (Mt. Rainier) format.
Right-click the InCD icon in the taskbar notification area near the clock, and select Properties. When the InCD Property Sheet pops up, select InCD Page Settings, and either check or uncheck the option "Format disc to CD-MRW" (if this option is missing, either your burner doesn't support CD-MRW, or InCD isn't installed properly). I leave the other two options (messages and Safe mode) unchecked. Close the sheet.
Alternatively, to call up the InCD Property Sheet, right-click your burner's icon in My Computer or Windows Explorer.
B. Insert a blank CD-RW disc into your writer. When the InCD Disc Information pops up, you may cancel it (nothing useful there). Right-click the taskbar InCD icon and select Format. When the InCD Wizard starts running, press Next, then select a drive if you have more than one, and click Next. If you wish to change the formatting options, click on Properties to access InCD Page Settings; otherwise click Next. Choose the Volume Label (no spaces!) and click Finish. Formatting proceeds in two stages, and displays progress information (which is not always consistent). Finally, you'll see the InCD message "The disc was mounted in InCD UDF file format", as indicated by the green N-W arrow on the InCD icon.
You reported a different behavior; could you check again? BTW, the above description is for CD-MRW; I don't remember if the disc ejects at the end of a non CD-MRW format.
As for using a previously formatted disc, on my box with Autorun on, after the disc is inserted, the arrow on the InCD icon flips from red S-E to green N-E, the InCD mounted message pops up, and Explorer show the disc contents, unless I press Shift when closing the tray.
Finally, always Eject from the InCD icon or Explorer; using the recorder's eject button may spoil the disc!
I gather you are still waiting for feedback from Ahead. In the meantime, you could check the points I mentioned. And make notes for yourself about what you see/change in troubleshooting; it pays off in the long run.