I had this problem and found it very irritating and I just happened on the solution luckily after a few hours of troubleshooting. So I thought I'd save other people the grief and despair by posting the solution that worked for me...
Problem:
When inserting a CD or plugging in a flash drive nothing was showing up in the "Devices" section of the finder sidebar, despite having enabled those items in the "Sidebar" section of the Finder preferences.
Solution:
The solution was really simple but not obvious since the option to show "hidden" items in the sidebar is, wait for it, wait for it... hidden. To make matters worse there are no visual queues in finder to indicate there are items that are hidden.
So to show hidden items, all you need to do is mouse over the category in question and click the "show" text that appears. Once you click "show" your items should appear in the finder.
Problem:
When inserting a CD or plugging in a flash drive nothing was showing up in the "Devices" section of the finder sidebar, despite having enabled those items in the "Sidebar" section of the Finder preferences.
Solution:
The solution was really simple but not obvious since the option to show "hidden" items in the sidebar is, wait for it, wait for it... hidden. To make matters worse there are no visual queues in finder to indicate there are items that are hidden.
So to show hidden items, all you need to do is mouse over the category in question and click the "show" text that appears. Once you click "show" your items should appear in the finder.