What kind of CDR drive do you have? Also, if you read the Requirements for Microstudio, you will see that your Video card must support DirectX 9.0 also. This is different than just having it installed on your Operating system. I would recommend upgrading your video card to an ATI Radeon 9200 (NOT SE Model). Then it would work correctly. Click on this link to go to the Requirments for Microstudio and scroll to the very bottom of the page.
http://www.mtu.com/basics/karaoke.htm