Don't worry about the length of your posts; it's much better to have too much rather than too little info!
Although MusicMatch looks suspicious (see 11 below), you should go through the following long list of other points as well.
1. Yamaha CRW-70 firmware 1.0B was available already in August '01, so you should upgrade to the latest one.
2. Many users report problems with Memorex CD-RW media. Maybe the problems are not so severe for 4x discs, but don't expect miracles.
3. Once you move to USB 2.0, you should be able to rewrite at 8x or 10x CAV (even for firmware 1.0B), in which case 10x or 12x discs will be needed. Even now for USB 1.1, try to get several discs of different brands for testing.
4. For full-erase in Nero, you may choose lower speeds if necessary.
5. Apparently you don't have Service Pack 1 yet, so you should get SP1 (or SP1x, whatever MS provides now). Use Windows Update to install SP1 and all critical updates and patches, but for now stay away from Windows Media Player, etc. You will need SP1 for USB 2.0 support. BTW, if you used a Yamaha installation disc to install USB 2.0 drivers, try to remove them first, if possible via Add/Remove programs.
6. Your versions of Nero and InCD are quite old. Use Control Panel | Add/Remove programs to uninstall InCD and EasyWriteReader (or InCD UDF reader; I'm not sure how it was called earlier), but keep Nero. Then download the latest versions of Nero, InCD and EasyWriteReader from Ahead's site (choose InCD | Program for InCD, and InCD | Utilities for EasyWriteReader), and install them in that order, rebooting at the end.
In fact it is not clear whether you have installed EasyWriteReader (or its earlier equivalents). So for safety remove whatever you have, but you may not need to install EasyWriteReader if you have SP1 and your burner doesn't support CD-MRW (see S8). Anyway, tell us if you have installed EasyWriteReader for your current tests.
7. As for Norton Utilities, you should disable NAV for InCD tests (it may interfere with both formatting and file copying), and perhaps remove autoprotection for your burner's drive.
8. Apparently your Yamaha doesn't support CD-MRW (Mt. Rainier), at least with firmware 1.0B. Once you upgrade the firmware and InCD, tell me if CD-MRW appears in InCD Page Settings, and Mt. Rainier in Nero InfoTool.
Also you may need to select an appropriate Write Speed in InCD Page Settings | Drive Speed Settings, depending on your CD-RW media ratings and USB version (e.g., at most 4x for USB 1.1). This option was available for firmware 1.0B and older versions of InCD; tell us if you still have it after the upgrades.
9. Keep Autorun on for now; you may experiment with "off" later.
10. As for your C:\Windows\System32\Drivers, cdfs.sys, cdrom.sys and udfs.sys will probably be updated by SP1. Googling for "cdac11ba" showed that cdac11ba.exe and cdac15ba.sys are related to C-dilla, TurboTax and spyware in general, and that they could possibly interfere with CD burning! I'm not sure if simple renamings will suffice here; use Google to find how to remove such spyware properly.
As for your C:\Windows\System32, cdm.dll and udhisapi.dll will be updated by SP1.
Thus you may remove the .sy_, .dl_ and .ex_ files, upgrade to SP1, and report the dir outputs again.
11. Now, here is something really interesting! Your Driver Information mentions MxLW2k, a driver installed by MusicMatch, which is probably included in your UpperFilters. (Note that MusicMatch JukeBox is mentioned in S11, and Q4 asks for "other burning programs or plugins"!)
Now, since this driver may conflict with InCD, the usual steps should be taken.
First, try to remove MusicMatch software via Add/Remove programs. If MxLW2k still appears in your Driver Information, change its .sys extension to .sy_ in C:\Windows\System32\Drivers and remove it from UpperFilters either by editing the registry as in http://support.microsoft.com/default.aspx?scid=kb;en-us;314060
or by running ulfilter.reg as in S11. Note that this must be done before (re)installing Nero, InCD and EasyWriteReader. Afterwards, as indicated in S11, you may check the filters by running the utility http://www.bustrace.com/products/devfilter.htm
Thus tell us which filters are reported by this utility. (Well, maybe I should include this check in the InCD guide.)
12. The parallel direct cable connection port driver Ptilink listed in your Driver Information should be harmless. Still, if everything else fails, you may try to remove it eventually.
13. Earlier versions of Nero didn't include Nero InfoTool; that's why you couldn't find it.
14. Your ASPI layers look OK. Actually Nero and InCD don't need additional system ASPI, but 4.60 seems to be quite harmless, so you may keep it for now. Nero ASPI will change after you upgrade Nero.
15. Once you get the USB 2.0 card and install it, check Device Manager if no yellow exclamation marks occur. As I said, with SP1 your card should be working without additional drivers. If you see anything strange, please report it.
In general, your burner may behave differently with the same media depending on whether USB is 1.1 or 2.0. Hence specify which symptoms you observe for each USB version.