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What is an MP3 CD?
An MP3 CD is a data CD filled with MP3 music files. The benefit of burning the MP3 files to CD as opposed to converting them to audio tracks is that a CD will hold 700 megabytes of data, but only 74 minutes of audio tracks. Depending on the encoding bit rate, you can fit several hours worth of MP3 music onto one CD. It's great for people who don't have an MP3 player, and even better for multi-disc audiobooks so that you could put the entire audiobook on one MP3 CD and never have to swap discs while driving.
Because MP3 files are compressed, the audio quality won't be quite as good as a regular audio CD. For many people, the difference is not even noticeable. Audiophiles with high end equipment might be able to tell the difference, but for casual users driving around with factory MP3/CD stereo systems in the vehicles, you can hardly tell.
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How to Make an MP3 CD
Depending on what CD burning software you use, such as Roxio or Nero, you should create a new project as a Data CD. Although you are burning audio files to a CD, you do not want to choose the audio option because an MP3 CD is a Data CD. After that, you can put the MP3 files on the CD just like you would any other kind of data disc.
For an MP3 CD, I recommend using CD-R discs instead of CD-RW mainly because CD-R is usually a bit cheaper than CD-RW. Be sure you close the session when finished burning the files, as this makes them work better with different model MP3 CD players.
You should resist the temptation to get one of those sticker labels to put on your newly burned CD, as these are known to cause problems for making the CD too heavy or too thick. Although it won't look as nice, your best bet is to get a Sharpie and manually label the CD.
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ID3 Tags for Song Information
To get the best results when using an MP3 CD, you should make sure your MP3 files have the appropriate song information in the ID3 tag. This is an internal label built into the MP3 file, but can easily be edited with programs like Winamp or even from within Windows. The ID3 tag contains the song title, album name, artist name, track number, and so on. Many MP3 CD players are designed to display information from the ID3 tag. If you are ripping an audio CD to MP3 for the purpose of making an MP3 CD, make sure you have the option to automatically fill out the ID3 tag.
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Folders for Album and Artist Names
For organizational purposes, I find it best to store music in folders based on artist and album names. For example, if you had MP3's from the band Blind Melon, then you should make a folder called Blind Melon and inside it would be subfolders for their Soup and For My Friends albums, or whatever other album names in which their music appears, such as movie soundtracks. That way you can easily navigate to a particular band and then the album where you can choose which songs you want.
When burning an MP3 CD, you should maintain this same file structure. Depending on the MP3 CD player you use for the CD, it may let you navigate by folder and file names, and that way you can go straight to a band and then their album. It's much easier than sorting through every song on the CD, especially when you can put hundreds of MP3's on a single CD.