I installed Fedora Core 2 with Minimal installtion. Later I wanted to install Development packages. So selected all Development packages in Add/Remove Packages. After pressing the Update button, Fedora asked for CDs and I inserted the appropriate CD. After saying OK, it displays an error message "Cannot read the device", but when I browsed /mnt/cdrom, it shows all the contents. Where is the problem? I think this is a BUG in core 2.

It might be. Software management in Fedora is a work in progress.

It's probably better to forget about Add/Remove Packages and the Up2date flashy thing, since they work just well enough to fool you into wasting time trying to make them work properly.

Instead, set up yum (which comes with Fedora). Yum won't read packages directly from a CD, but you can dump all the packages from the RPMS/ directories on the CDs into a directory and make that a yum repository. I've done this on my workstation and shared the repository via HTTP so that my laptop can pick up packages from there as well, so I never have to hunt for CDs.

There's now a graphical interface for yum, but I haven't tried it yet.