Some users have reported an issue in which they can no longer import MP3 or AAC files from audio CDs after the update to iTunes 10. When this problem occurs, he following behaviors may take place:
the Mac OS X Finder recognizes the CD and mounts it, but iTunes rapidly switches between the CD and the music library–what some have called a “strobe-light” or flashing effect the CD is recognized by iTunes, but the message “disc cannot be found” is displayed when the user attempts to import it the CD does not mount at all and is not recognized by iTunes, but mounts when iTunes is quit Fixes
Turn off track name downloading. Navigate to the iTunes menu, then Preferences. Click “General” at the top of the window then deselect “Automatically retrieve CD track names from Internet.” Close preferences and quit iTunes.
Start iTunes again and re-enable this option; you may now be able to import CDs. If not, turn the option back off.
Hold down spacebar while launching iTunes. Oddly, it appears that holding down the spacebar while iTunes is launching may allow import of CDs.
Downgrade iTunes. If all else fails, you can downgrade to iTunes 9.2.1.