You can use the AppleCD SC drive for Macintosh CD-ROM discs, but not for MS-DOS CD-ROM discs.
This problem only occurs with the AppleCD SC drive. The AppleCD SC Plus, AppleCD 150, AppleCD 300, or AppleCD 300 Plus drives work without a problem.
With the AppleCD SC drive, you can sometimes read directories, however trying to run applications from the disc results in the error message "CDR101: Not ready reading drive E, with Abort/Retry/Fail."