I usually burn to file at full DVD Quality (8.7GB) and then use DVD Shrink if I want it on 4.7GB. Occasionally DVD Shrink fails to work properly - in one case it finished but the shrunk version was more than 4.7GB.
Prevent any Nero programs from starting with Windows (ESPECIALLY InCD) - the failure to recognise the drive is very common on systems with Nero installed.
Instead of Nero burn your shrunk result with the free ImgBurn.
Insanity is hereditary, you get it from your children
For possible reasons, why PrE cannot find your multi-drive/burner, see this ARTICLE. All sorts of software, can effectively "hide" your burner from PrE. Also, there can be issues with the physical connections for your burner, or OS issues with the burner.
PS - for the failure to Burn to Folder, how much defragmented free-space do you have on the destination HDD?
Hunt's article link didn't come through (I just had a problem with the forum suddenly not allowing me to post, had to go out and back in)
Anyway... some reading... Things and Software to AVOID when authoring/burning a DVD
Start --> http://forums.adobe.com/thread/608660
#2 has WHY Explained http://forums.adobe.com/thread/607390
Create an ISO (Encore) or folder on your hard drive (Encore or Premiere Elements) and then use the FREE http://www.imgburn.com/index.php?act=download to write files or folders or ISO to disc (send the author a PayPal donation if you like his program)
Thank you. About that time, the forum shut down, due to a major spam attack. Obviously, my link went dead, but you stepped in, and saved me.