You need a programme that reads from the CD digitally, not via that cable (since it appears not to be connected). In the options on you CD player you may be able to select digital read. You are perhaps using KsCD or Gnome's CD Player.
The easier way is probably to play your CDs with a programme like Totem, or Kaffeine, or MPlayer, or any of those movie players. They are set up to read disc digitally by default. Find an option there like Play CD, and away you go.
I too had this question, and was offered much advice about connecting up cables, but then by chance discovered that the movie playing software all did the job without further ado.
HTH,
Declan
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