That sucks..I assume you have it connected to the internet and the latest firmware, right?
My suggestion if that's true? Don't return it or try and get a new one. First and foremost, if you've only had it a month, backing up your files should be easy because there shouldn't be a lot of them. Do that to say a thumb drive - get any pictures, save games, music etc off, then go to the System Settings and restore factory defaults. Then just connect to the internet, update again, and see if that works.
If it still doesn't read discs, then call them. Otherwise, calling them is foolish in my opinion, because by the sounds of it you don't want to risk the type of system you'll get back if they do indeed offer to replace it. That, and they're going to tell you to do exactly what I just did anyway...I'll even put money on that=P
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