Okay, so I got a fairly quick reply from Atari CS regarding the "insert CD" problem on XP with the final patch when the game cd was already in the drive. I followed the steps they told me to go through, still the same problem. Rather than await their next reply, I did some web searching. The problem seems to involve the cd-rom not recognizing DMA or somesuch (I have no idea what this means), and the way to reset involved going into Control Panel>System>Device Manager>IDE controllers and checking the properties for the primary and secondary devices listed, then clicking on the "Advanced" tab. Well, for some reason, I didn't have an "Advanced" tab to do the DMA switch. So, after a little more searching, I found a way to edit the registry to perform the fix. Even though I have heard horror stories about people who don't know what they are doing (like me) making registry changes and screwing up their computers, I did it anyway - and it was soooo easy, and the game now works! Finally! Here are the instructions ----
Go to Start>Run and type regedit.
Go to HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\ Class\{4D36E96A-E325-11CE-BFC1-08002BE10318}\ and there should be several keys 0000, 0001, 0002, and 0003. Look under each one and delete MasterIdDataChecksum and SlaveIdDataChecksum. Reboot.
Don't ask me how it does it, but it somehow resets the DMA for the cd-rom. Problem solved for me, hope it works for you.