How can I restrict my .net based windows application to run only when the original CD is present in CD drive. Also the user shouldn’t be allowed to create copy of CD.
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You can’t do this — your software might be running in a virtual machine with a virtual CD drive and people could configure those to be indistinguishable from the real thing.
I believe some game companies tried a scheme where they put physical defects on their CDs, and the games would then only play if it found those defects. The idea being that naive program wont be able to copy the disc because of the unreadable parts, or that a copy made would not have the same physical defects as the original. However, unless you have access to such equipment, I don’t think you can do this.