Windows 7 is not recognizing the UDF filesystem of a CD
Solution 1:
Open Disk Management (Start > Run > diskmgmt.msc). Check to see what volumes are present on the CD in the drive. If you can see the UDF volume and the CDFS one, then Windows is just mounting the wrong one. You may have to manually mount one of them (Right click > Change Drive Letter and Paths... > Add... > OK > OK) to see the "correct" one.