Could you describe the setup a bit more completely?
Is the RHEL 5 OS the VM host or the VM client? If it's the host, then what's the client OS (or vice versa)? You physically put a CD in the host machine, yes? Are you trying to mount the CD in the host OS or the client OS?
If you're trying to mount a physical CD from the host in a VM client, you typically click the drop down menu at the top (called "Devices" or similar), and select the CD/DVD drive. This will pass the device to the client, allowing it to read/write like it normally would with the physical drive.