But works when the regular batteries are used, or works when using the other rechargeable batter pack. Why?
Microsoft reconfigured the wireless controller power requirements at one point, around August 2007. Older packs don't work with controllers made after this point. I know Nyko has a replacement program, don't know if Microsoft does. If that is not the case, it is just a busted pack. Try to get a replacement through warranty or just buy a new one.