I'm no expert, but have you tried other methods of recording, like mic or optical/line in from a CD player?
There's also an alternative to OpenMG which is called Simple Burner. It transfers songs from an audio/virtual CD, doesn't create ATRAC files on your PC and it doesn't prevent you from deleting transferred songs off your MD.
I hope I never have to touch OpenMG again - its such a clunky POS.