SDH,....note that he says the optical drive does work if it's booted from implying a working device
it's windows that does not see the drive and this was usually caused by the corupted filter driver registry entrys i mentioned
however your advice about SATA CD/DVD drives is a point i failed to mention you are correct that it's best to replace a PATA device with a SATA device where it's possible as they are usually cheaper, easer to find and based on a later spec/standard
also a bad/defective windows install cd can also cause problems if possible try another install disk
last, the xw6400 and most likely the xw6200 does support booting from USB, so you can download the win 7 install image then use "rufus" to create a bootable image of the cd on the USB key