I don't know that much about CD-RW's either, but since I'm online, and so are you, I thought I might as well give you my quick opinion.
Before you think about taking the drive back, its best to check thats where the problem lies. It might be that your PSX games are badly scratched (you say they are scratched), and that your CD writer doesn't like this. Maybe you could try backing up another CD you have which has no scratched on first (after all, it'll only waste one CD). If this works, then you know its not the CD writer. If it doesn't, then you know it is.
If I'm wrong, feel free to tell me, as its the only way that I'll learn!
