I have figured it all out now. I installed Nero 6 from my friends serial to test it - same problem!!!!
So I reinstalled 5.5 again and continued searching. Here is what I found. I found 1299 files in my My Documents folder that were of a .IDX extension. eg: CAD0.IDX and SA61.IDX all with sequential numeric file names. I also found four other files: cdbidxl.dat. necdb.dat, nettrkdb.dat, tdbidxl.dat.
I am not sure if these files are benign or not, but moving them all to trash, fixed the problem. I mean, when I click the "Add" button now, it hangs for 5 - 10 seconds, and then finally the Explorer window of My Documents appears. Can now burn a cd.
Perhaps there is something weird about how Nero Express 5.5/6 calls
the MyDocs.dll. Maybe it keeps calling when My Documents is being
busy or something.
Anyways, deleting these files has fixed things, although a 5 -10 seconds pause doesn't seem right. Using Nero Burning Rom (full version) doesn't have this problem, as it opens to an Explorer window already.
But, anyways, interesting how both Nero Express 5.5 and 6 are basically the same software underneath.
This would also explain why I never had a problem with my old cd burner,as I had a full Nero Burning Rom 5.5 with this burner, and only Nero Express had this issue.
I will try the same on my customers pc, and let you all know.