Dave has a lot of songs that had been downloaded from Napster a long time ago, and all of the cuts have been put on a disc at least once. After doing some rearranging, when he tries to burn certain cuts to a disc, he gets a warning message that says he can't rip or burn them because he doesn't have a license. These songs were all paid for, though. The files were on a data disc, and some of the songs are WMA and some are MP3. If he were to make an audio CD, all the songs would be converted into a special format that could be played back in regular CD players.
His song files probably have copy protection in them. If he were to buy any of those songs today, he wouldn't have to worry about it because music files don't have copy protection anymore. In order to play those back or rip them, he'd have to use the software he used to buy them. If they are iTunes songs, he'll have to open them in iTunes and burn them in iTunes. He'll also have to be logged into the account that he used when he bought those tracks.
It is possible to strip out the copy protection, though. Apple created a way to replace the copy protected cuts with unprotected cuts. It's called iTunes Match, and it costs $25 for a year. This will match the songs in his collection with higher quality unprotected versions. He could also use the "analog hole" way around it, which means playing the song back and recording it as a WAV file with no copy protection in it.