That there are no yellow exclamation marks in the hardware section means both cd and dvd units are installed etc. OK; thus no need to worry about any driver re-installation.
The plethora of icons, folders etc. on desktop suggests possibly that for some reason or other the copying process dumped the data to the desktop area - rather than to wherever it normally goes? Usually Nero and similar utils default to copied data either to a default destination on the drive (as an iso file) or straight to the target/destination disk itself. You can usually choose to make an iso (to the hard-drive) or to the cd/dvd itself. This option is not obvious but does exist in such utils; the default is of course a standard copy...
Possibly your Nero-6(?) util got a little screwed up/konphuzed...; possibly there was a glitch in the copy proces? Either way "stuff" going to the desktop area is NOT a normal option... and your appparent resoultion is/was probable the best path; especially as it appears to have resolved the mess - when accompanied with the re-install of Nero(5)...
Nero-6 (the CD only) is around at computer-fairs for about £5-6...
Useful fail safes to have to hand are an ERD (Emergency Repair Disk) for windows 2000; you can make one of these any time - and if you don't have one already (and current) then make it sooner than later. Other item: back up the registry both to the hard-drive and to a cd; keep safe etc.
Whenever you make changes to the system (including installing any software) - renew/update the ERD; also the copy of the registry.
Unlike XP there is no restore point option/facility in W2K; but restoring to an earlier registry is often one way to get around a problem that apears without warning (especially if as a result of installing software etc.) - which is why the regular backup of the registry is wise...
Personally in W2K before installing any major software utils I tend to favour some form of registry backup; allows the option to recover the system to more or less what it was prior to that installation if needs-be; but this in not always a viable resolution... In XP one just creates a restore point prior to th changes (hardware/software) then goes ahead with the proposed changes... One can simply return to that restore point if needs-be in event of trouble...
It would be wise also to run a full virus scan; and also (install if you haven't already and) run AdAware and SpyBot search and Destroy utils to clean out the system of any possible junk/nasties that "may" have impinged here too...?
AdAware: http://www.lavasoftusa.com
SpyBot: http://www.safer-networking.org
and ccleaner is also useful - general cleaner out of junk etc...:
http://www.ccleaner.com
All three are free for home/domestic use; all three regularly updated re' defintions will help keep you free of pest/malware etc...
And again regularly update the W2K ERD - when you've made it...
Pretty spot is Torquay...
Happy 2K7.