I have one.
I believe they all have Phillips drives, so they do read CDR's.
The games are seperate. The crimson skies disk is sealed, with "NFR" on the outside, while Fable is unsealed with "NFR" on the actual case with a sticker.
The unit has the original crystal Xbox box (sic). With a paper add on for the Fable and CS inclusion.
Great package, great price for us Canadians.