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Selecting this option in iTunes ensures that your friends will see the track names when they insert your custom CD into their computers.
I used iTunes to burn a few awesome mix CDs for my girlfriend, but when she puts the CDs in her Mac, the track names either show up blank or with completely wrong track information. We had to manually type in all the information about each track. What’s going on here?
This is a topic that provides a great deal of confusion for many.
The quick answer is that if she’s going to be importing the tracks into her computer (instead of playing the CD in a normal audio CD player), you should burn your CD as a data CD. To do this, go to iTunes > Preferences, click the Advanced button, choose the Burning tab, and then select Data CD Or DVD. This is the equivalent of making a backup copy of your songs, which keeps the song title, artist, and album information intact for each song. Note that your girlfriend won’t be able to play a data CD in a normal audio CD player, nor will she be able to play any protected songs that you’ve purchased from the iTunes Store unless you authorize her computer with your iTunes username and password.
The explanation behind this answer is more complex. iTunes uses an audio CD standard created back in the 1980s that doesn’t allow for any text information about the tracks, such as artist name or song title. Yet whenever you insert a commercially released CD into your computer, iTunes goes online to a massive music database called Gracenote and looks up the track information based on the length of each track. iTunes then saves this information for future use into the CDInfo.cidb file located in ~/Library/Preferences. When you burn a custom audio CD, iTunes saves your track info into the CDInfo.cidb file as well. This is why you can reinsert a custom audio CD into your computer and iTunes will still recognize the song titles…but only on your own computer.
You could conceivably carry over your CDInfo.cidb file to your girlfriend’s computer (by putting it in her ~/Library/Preferences folder), and she would get all the track information about the custom audio CD that you burned for her. Many people have submitted custom CD track names to Gracenote by choosing Advanced > Submit Track Names in iTunes, but Gracenote was only supposed to be used for commercially released CDs and it should never be used for personal CDs. This misuse of the Gracenote service is the reason why you often get incorrect track names in iTunes when inserting a custom audio CD.
One final note: You may have noticed the CD Text option within the Advanced preferences of iTunes for burning audio CDs. This option actually does write song name and artist information onto a normal audio CD, but this information can only be read by certain audio CD drives. The CD drives that ship with Macs are unable to read this CD Text information.