In the days following last week's debut of Microsoft's Xbox 360, video game fan sites and the mainstream press seemed to be in a race to outdo each other with reports of problems with the new consoles ...
Use another cdrom unit that you know can read burned or rewritable disks to jumpstart the initial install. The stock xbox dvd drive is known to dislike cdr/cdrw.
The first obvious step is to use the D-Bad on the controller to select Restart the Xbox option and then press the A-button. If it was a minor issue, you should be able to access the Xbox Home Screen.