roach,
It sounds like you connected the drive correctly. By trying to boot without the drive connected eliminates the drive itself as the problem.
Try going into Safe Mode again and remove the CD Drive from the Device Manager. Then try to boot normally. If that does not work you will need to find the CD Drivers and manually remove them. (I doubt there would be anything in Add/Remove Programs.)
Take Care,
Richard
P.S. You could disable the CD Drive in the Device Manager while in safe mode, if what I mentioned above does not let you boot normally.