For some reason the cdplayer_applet requires write permissions with /dev/cdrom. This causes it to not be able to see any cd's. /dev/cdrom should never be write-able as it could be made into a hard-drive (and the symbolic link not updated) and letting users write to it would be bad.
gnome-core-1.0.3-15 Sorry about that
Please close. I rebooted my box and the problem went away. I have no idea what was going on.