Your optical drive is not Atapi compatable
If this is a desktop machine you could see if the machine has a "normal" IDE socket on the mboard - if so (and you have the room) you could add a cheap IDE optical drive and then come back for help re-confoguring VRPC (if necessary).
If this isn't possible then you will be able to access CDs in DOS mode by making a HostFS mount that points to the drive letter of the drive, e.g.:
Path : D:\.
Mount : CDRom
(Note the trailing full stop). See the VirtualAcorn user guide for info on making a new HostFS mount.