I have bought a cheap external CD drive for my Samsung N10 netbook.
The netbook recognises the drive and the drive will read files from a CD with no problem and displays then on the netbook and will transfer them to the hard disk BUT when I put a program CD into the drive to install on the netbook the netbook sees the CD drive but shows it as empty the progames have loaded onto my PC from the same CD's without a problem).
More aboutexternal drive netbook problem
What brand is the external drive? Take a look at the manufacturer's support site to see if there are any drivers, software, etc... that you may need to download.