IIRC, it's down to the laser wavelength -- CDs use red/infrared, DVDs use blue. Unless your DVD has a tunable laser, or a dual laser pickup, it will have difficulty reading some media (because they're tuned for the other end of the spectrum).

Added to this is the fact that the refractive index of CD-R and CD-RW media is different to that of normal CDs, and you can see why it gets complicated. I can only assume that the refractive index of CD-RW is sufficiently different that DVD drives have a fighting chance of reading them.

My box at work has both a CD drive and a DVD drive in it, because the DVD drive is hopeless at reading a lot of normal CDs, let alone CD-Rs. Also, it can't rip for toffee .