Depends on the laser in the machine. Some v3s (well, I think two or three) have been reported to be able to read RW media. Make sure that you're using good media (TDK, Verbatim, Ritek, etc.). v9+ should read RW for sure, and most 7+ machines have no problems.
I wouldn't advise adjusting the pots... while you'll be able to read the RW media, the laser will work harder and as a result, die earlier. You should stick to R media anyways... RW is harder on the laser anyways I think.
ALLERGY ALERT: The above post may be nuts.
N64, GBA, both un-modded.
NTSC U/C PS2 v4 w/No Solder v4 (SOLD, DRE... Laser Died
NTSC U/C PS with Plugmod (SOLD to pay for above