habee is quite right, you do
have to be careful with CD labels. In my business we burn as many as 500 CD's or DVD's a month, and because my wife is a music collector, she burns all of the music CD's for our RX. We use Neato (by Fellowes) matte finish labels, and have never had a problem with labels peeling or otherwise interfering with the disc or the loading mechanism.
These are considered "permanent" labels, and that can be a drawback - once they touch the disc - even if you accidentally touch it down in the wrong spot, that's it, you're NOT going to peel it off cleanly. Make a mistake, you burn another disc. If you use one of the jigs provided to locate the label, centering it is not a problem.
If you need to change the label for some reason, DO NOT place another label over the original - it won't stick as tightly, and may interfere with the loading mechanism. CD's are cheap - burn a copy and put the correct label on that
That label also helps protect the data on your CD or DVD. The TOP of the disc is the vulnerable spot, not the bottom as you might expect. The way the disc is made, there is a fairly thick protective plastic layer on the bottom of the disc to which the metallic film on which the data will be inscribed is applied.
Depending on the manufacturer, the layer on top of the film may be a very thin plastic sheet or a coat of lacquer. For that reason, a good label will help protect that vulnerable top of your disc from mishandling. Of course it is always a good idea to protect your discs in a rigid CD wallet, jewel, or clamshell case.
At this point we should mention disc repair. If you have a disc that becomes scratched, there are several commercial products that can help recover the data. Toothpaste (paste, not gel) has been used successfully to polish out the worst scratches, although I've used a good auto polish to do the same thing. Carefully apply polish and buff from the inside of the disc outward, not around the disc. You want any remaining marks to be perpendicular to the track. If you can get the disc to play properly, copy it to a fresh disc and discard your repaired one - it's never going to be completely right.
If you have small children in the house, teach them to handle discs with respect, by the edges - the way we used to handle vinyl discs. I don't know how many movies we've rented that were smeared with sticky fingerprints, oil, carpet fuzz, and undifferentiated goo that can wind up inside your player. It's a good idea to LOOK at any disc before you load it.