I posted this as a bug to Apple, because I didn't find it on forum here. David Pogue's new "Missing Manual" was good enough to show how to do multi-session burn (even on a CD-R, although my problem was on CD-RWs). However, the Finder's response was funky.
Anybody else able to reproduce the effect, as I described it to Apple Bugs:
Apple TiBook 667 700MB RAM 60MB drive OS 10.3.1 MatshitaCDRW
Burning multi-session CD burn with Disk Utility from .dmgs on desktop caused THE LATEST burn to be shown as a FOLDER (rather than CD) on desktop & in Finder window sidebars until RESTART.
This is true even if disk is ejected and re-inserted. In that case, even ejecting CD does NOT remove last-burned session to disappear from Finder sidebar. Only RESTART (well, I didn't try logging out&in) got the newly burned images to appear correctly as CDs.
Also, while the images are appearing as FOLDERS, they are NOT EJECTABLE.
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