The interesting bit, really, is why this problem is so mysterious. In think the mystery comes about because only old-timers wonder about this, for most people I suspect things just work (on CD anyway).
Long time OS X users remember when CDs were littered with .DS_Store and other OS X "dot" files holding file metadata. Some versions of OS X create these even when there's no extended attributes, resource fork, or other metadata for a particular file.
It's not just CDs. Thumb drives (USB mass storage media) got them too.
They're annoying as all get out. Media players that can manage AAC or MP3 files get confused by the dot files. At best they have to be skipped over.
So how do you get rid of 'em?
Well, in 10.0-10.2 you had to run use unix commands: macosxhints.com - Burn CDs without the invisible .DS_Store files.
In 10.2 or so the OS changed to burning hybrid CDs, a mixture of plain old Joliet and HFS+:
The .DS_Store (and many other mac-only metadata) files will be stripped from the crossplatform ISO/Joilet images. These files will still show up for the HFS side of hybrid images, so mac users will get them but other users on other platforms won't."Some media devices still have trouble with hybrid CDs. I don't know about 10.5, but in 10.4 I don't think you can control this.
If you want to burn the simplest MP3 or AAC CDs for external devices, you need to specify PC Joliet as the Disc Type. In Disco ($20) and Burnz ($10) this is an option.
When you do this the PC view will not show any metadata or dot files.
Inexplicably, neither product explains why you'd want to do this. I guess they assume everyone understands that "PC Joliet" means no funky OS X metadata dot files.
Disco, by the way, has a problem in 10.4.11. When you insert a CD the finder blocks Disco's burn. No dialog is displayed, but nothing happens. I have to close all Finder windows to get it to work. I think there must be better options, I'm looking around.
Oh, and this is still a problem with thumb drives, at least in 10.4.
Update 6/9/08: I was really annoyed with Disco.app -- at one point it wouldn't burn no matter what windows I closed. Burnz didn't give me a simple enough control over what format I burned. Now I'm trying the free OSS app Burn.