Why is my xbox telling me that my disc is unreadable?

oliverpaulaspinall, the first thing I would suggest is that you clean the laser. you can purchase a DVD cleaning kit at most department stored. Should you have no luck finding one, you ill have to disassemble your optical drive. Here is how to get it out, and on here you can see how to disassemble the individual drive. Make sure you select the right optical drive, there are a few different ones. Once cleaned you can try it and see what happens. If the cleaning did not help, you can try a Pot adjustment. Great instructions are downloadable from here. Be sensible with the adjustment. If you are not up to that, you can of course also replace the laser assemble, or the whole drive. Just remember that "Xbox 360 is designed so that the DVD drive works only with the particular game console it is installed in". So you will have to reflash it or keep your original PCB and replace your drive with the same model, and switch the PCB over. Hope this helps, good luck

Likely a laser issue, replacing the laser should fix this, make sure to observe the drive with the lid off (don't get shot in the eyes by the laser, use extreme caution with exposed laser devices). This way you can determine if the laser is faulty or if the drive HUB is the issue (no spin).