It sounds as though you might have any one of several problems. You might have a corrupted file and need to clean the registry. Quite possibly, the drivers for the device that is generating the message could be in need of an update or replacement. If you have recently updated any drivers, software, or added any hardware devices, this could also be the problem. From what I have read, others have encountered this problem when using Windows Vista operating system and a Lexmark Printer.
Boot up in Safe Mode
The strategy of booting up in safe mode uses the least amount of drivers, so it is your best option for getting things going. If the message “device monitor stopped working” does not appear and the computer is working properly once you boot up, then you can try any of the following options in order to fix the problem permanently.
Run chkdsk
In order to rectify any disk errors that might be creating this problem, you should run the chkdsk utility. This will check for problems related to cross-linked files, lost clusters, directory errors, and bad sectors.
Follow this path: Click “Start”→ click “Run”→ Type “cmd”→ press “enter”. At the prompt, type in “chkdsk volume:/r” in order to recover readable information, locate bad sectors, and repair errors.
Repair and Restore the Windows Vista Operating System
If your operating system happens to be Windows Vista, consider repairing and restoring the operating system. For detailed instructions on how to do so, read the article found at this link: Microsoft936212. This strategy will scan and replace system files that might have become lost or damaged.
Clean the Registry
In case your registry files are severely damaged, I suggest using a reliable application such as RegCure to find and repair them.
Uninstalling the Last Hardware Device Added
If you recently installed some type of hardware device prior to the problem’s occurrence, you should uninstall it completely. If the problem is resolved, then you can safely assume that some type of incompatibility exists between this hardware device and your operating system. Contact the manufacturer of the device for tips and suggestions as they might be able to offer a specific solution.

I think you’re right - somehow your device driver got deleted. Luckily, it is pretty easy to get it back. First, check any cables from your CD-ROM drive to make sure nothing is loose. A loose cable can cause the system to not see the drive.
Reinstalling an Internal DVD Drive 