Yes, it will play CDR's. It's a great transport, but needs some work to make it a good RBCD player. It's pretty darn good in stock form on SACD.
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I have had a SCD777ES for quite a while now. It has been trouble-free and plays CD-R's without a problem. The transport is quite robust and compares favorably to any high-end transport available today. I feed the digital output (redbook) to my Levinson 30.6 and while not quite the equal to my 31.5 transport, it is a close call.
I have never regretted buying the 777, unlike some other equipment I've had in the past.