This is the best choice for photographic CD label printing for small and medium print runs. The advantages include: 

Full photographic quality CD and DVD printing
Full CD print coverage right to the outer edge

When printed on a white CD surface, our printers produce stunning labels with dense fields of color, full color photorealistic images and attractive text. Our printed CDs and DVDs have a completely smooth laminated finish. They are remarkably durable, and are resistant to pressure, moisture and light.

Paper labels: They have their purpose but they look unprofessional and can potentially damage the disc drive. We do not use paper labels because of this  reason.
Ink-jet printing (directly on disc): The CD labels that look great! This is the method that we use.