I remember reading, quite some time ago, I might add, an article in MacAddict that made a mention that labels applied to CDs can indeed interfere with them being played in a computer. (On the other hand, I think in th exact same issue there was a review for label-making software!)
It's one of the reasons I've never killed myself figuring out how to do this. I use a Sharpie. Very inelegant, but it works.