Sounds like kind of a silly reason to take the game off of the shelves. I mean, the Quake games are still being sold.
sesquipedalian - yeah, I've tried repairing it with one of those 'game doctor' thingies. It's pretty much a dead CD.
I was going to list "City 7" as my location, but didn't know if anyone would get the Macross reference. "Chi Draconis 7" is just a really geeky way of referring to the Minbari homeworld (B5). I've changed it to something a bit more recognizable. ^_^
karajorma - thank you. I got them working. I put all the movie files in the data/movies directory and that didn't work at first, it still wouldn't detect my CD #2.
However, I then edited the cutscene.tbl file to say that all of the cutscenes were on Disc 3. So now, I can put in Disc 3, and it plays the cutscenes off of the hard drive, only checking to see if Disc 3 is present. The intro works, all the monologues, even the ending, and they all read off of the hard disk - there's no CD drive activity at all, even for the ones that are on disc three (I had copied those over to the hard drive a while ago). So I guess with the directory being a sort of 'override' and the cutscene.tbl file telling it to look for only one disc, all the movies will play.
I guess it's a good thing I had those files on the hard drive, then. Thanks to your suggestion I seem to have solved my problem.

Ah, sweet victoly!
Hmm... I wonder if this would work for FS1? Or maybe there's a way to make the game not look for any disc for the cutscenes?