Muzicman,
You do have to tell Hoster which folders to look in for your .KMA files. This is incorrect, it won't search the entire computer, but only where you tell it to.
I would add all of the Folders that you have .kma files within, then Delete the songs.mdb database file. Then rebuild the Songs Database.
As to the reason the drive is not showing up, I have never heard of this. If Microstudio will see it, then it is working with our ASPI drivers and the program is able to see it attached to the computer. Microstudio and Hoster use the exact same code to find the CD-R drive. This is why I was asking what version of Hoster you had installed.
If you have 2.014, then it will see the 48x drive. Make sure that the ASPI drivers selection in Hoster is set to the exact same as in Microstudio. This is the only thing that could do this, that I am aware of. This is located on the Tools Tab under Hoster. Make sure when you make a change, that you close the program and reopen it.
If this doesn't do anything then try installing the ASPI drivers located at:
http://forum.mtu.com/showthread.php?threadid=493
Install Solution #1 first and try our latest ASPI driver. This should be what is installed on your system already, because it is included with Microstudio 2.506.