Ok did all of the above suggestions and it is still skipping. I did a diagnostic of the cd in itunes and got the following result:
Microsoft Windows 2000 Professional Service Pack 4 (Build 2195)
iTunes 7.0.1.8
CD Driver 2.0.6.0
CD Driver DLL 2.0.6.0
LowerFilters: AFS2K (3.1.20.0), CDR4_2K (5.3.2.31),
UpperFilters: GEARAspiWDM (2.0.6.0), Cdralw2k (5.3.2.31),
Video Driver: Velocity 128\NV3
IDE\DiskST310211A_3.54____, Bus Type ATA, Bus Address [0,0]
IDE\CdRomPIONEER_DVD-RW__DVR-111D_1.23____, Bus Type ATA, Bus Address [0,0]
If you have multiple drives on the same IDE or SCSI bus, these drives may interfere with each other.
Some computers need an update to the ATA or IDE bus driver, or Intel chipset. If iTunes has problems recognizing CDs or hanging or crashing while importing or burning CDs, check the support site for the manufacturer of your computer or motherboard.
Current user is an administrator.
D: PIONEER DVD-RW DVR-111D, Rev 1.23
Audio CD in drive.
Could not open CD handler, 32. Problem with installation of drive in Windows or drive contains copy protected CD.
Audio CD reading succeeded.
Get drive speed succeeded.
The drive CDR speeds are: 4 10 16 20 24 32 40 48.
The drive CDRW speeds are: 4.
The drive DVDR speeds are: 4.
The drive DVDRW speeds are: 4.