are you using OS X or 9?
i've never really paid attention to those format dialogs. on X, if i'm making an audio cd, i'll stick it in, and it brings up that dialog. i just click 'continue', and then go into iTunes, make my playlist, then burn from within iTunes.
after you click 'choose', is there any cd drive activity? if not, then just go to iTunes, and see if you can burn there.
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