Many people reported problems with 3.37. I have the same burner running fine on XP Pro SP1 and 98SE, with InCD 3.51.61 and the latest EasyWriteReader to read CD-MRW on DVD-ROM drives. The only trouble was with some CD-MRW disc formatted earlier with 3.31.
If you are happy with 3.31, you may stay with it; I moved to 3.51.61 because it cooperates with EasyWriteReader on the same system.
If your friend has XP SP1, it will read standard CD-RW (non Mt. Rainier) without any additional reader. On the other hand, installing EasyWriteReader for CD-MRW reading is easy, and you can always remove it without messing up XP.
The main advantage of CD-MRW is quick formatting (20 secs compared to about 10 min for standard CD-RW).
Most of InCD and EasyWriteReader problems are caused by remnants of DirectCD or the Adaptec/Roxio plugin installed by WMP; just search for InCD 3.51.61 on this forum, www.cdfreaks.com