Before you do any reinstalling, you need to confirm whether the DVD drive is functional or dead. Go to Apple menu > About this Mac > click on More Info, to get the System Profiler. This will tell you whether the DVD drive is visible & potentially functional.

It isn't showing in SYstem Profiler - but I am positive that is because of the firmware update. I burned a disc literally two minutes before I did the update. No question that it was the firmware.

So how do I do the reinstall?

http://en.wikipedia.org/wiki/Target_Disk_Mode
http://guides.macrumors.com/Target_Disk_Mode
http://support.apple.com/kb/HT1661

So - when it rains it pours - the machine I want to boot from has a firewire port but the internal drive doesn't work on that one either. However, I do have a new powerbook without the firewire port. Do you think I could try doing this except connect the two computer via ethernet wire?

I only suggest that as when I bought this new macbook - I hooked up the macbook to the old machinr via ethernet and it copied all my files, programs, passwords, settings etc to the new macbook.

BTW, I don't think erasing and reinstalling would make the drive work...?

Doesn't a firmware upgrade change the firmware on the drive itself, not the OS?

OK - - well then I don't want to go through all of this if it's not going to work. Any other takers?