From Blizzards webbased Diablo 2 support site:
Is the computer asking for the Play CD even though it is already in there when trying run Diablo 2?
URL:
http://www.blizzard.com/support/index.asp?Action=Solution&BugID=173
If nothing happens when you try to start Diablo II, or if you are instructed to insert your Play Disc when it’s already in your CD-ROM drive, then please try the following steps:
Install the latest Diablo II patch.
You can find the latest patch information available for Diablo 2 on our patch page.
Use the original disk
If you are using a backup CD, a burned CD, or a CD emulator program, use the original game disk instead.
Administrative rights
Windows 2000 users should make sure they have administrative rights on the system they are logged in with.
Windows 2000 users should make sure ACPI is enable in the BIOS.
Gateway users
Typically with Gateway computers there are two things that conflict with the game running, a program named The Help Spot and if you are using the original OEM drivers for the sound card, the Gameport Joystick will conflict. Uninstall The Help Spot and disable the Gameport Joystick. For step by step instructions on how to uninstall The Help Spot and disable the Gameport Joystick click here.
Kenwood TrueX
Users with Kenwood TrueX CD ROM drives may require a Firmware Update to read the Diablo 2 Play disk. The Firmware Update is available for download at the Kenwood Technical Support Site. For more information click here.
Real mode drivers
Windows 95 & 98 users may have a conflict with Real Mode Drivers loading for their CD-ROM drive. Please disable any Real-Mode drivers, as they are known to cause conflicts within the game. For more information on disabling Real Mode Drivers click here.
Protected mode
Make sure you are using Protected Mode (32-bit) drivers for your CD-ROM drive. For more information on Protected Mode Drivers click here.
Sync data transfer
Try enabling or disabling the CD-ROM settings for Sync Data Transfer, DMA, and Auto-Insert Notification. For more information on enabling/disabling CD-ROM setting click here.
CD-Rom drive letter
Force the Reserve Drive letter assignment of your CD-ROM to match the current drive letter assignment of your CD-ROM. For more information on how to change the drive letter assignment of the CD-ROM click here.
Submit your information
If the above suggestions do not work, send Blizzard support your system information.
Users with Intel’s Ultra ATA driver version (6.10) may have problems reading the Diablo 2 Play CD. Diablo II will work with an older version of Intel's Ultra ATA driver (version 6.03). Version 6.03 is available for download at
http://appsr.cps.intel.com/scripts-df/filter_results.asp?strOSs=17&strTypes=DRV&ProductID=182&OSFullName=Windows*+98&submit=Go%21
