OK, here's the full story...
1. You cannot burn DVD games on a CD-RW. You need a DVD-RW drive for that. If you do not want to get a DVD-RW then you can download Rip Kits that take out movies and sound from the games so that they fit on a CD but even then you will need a DVD-Rom drive to get the data off the discs. You can only burn CD-ROM games on a CD-RW e.g.: Lotus Challenge. If you do want to get a DVD-RW then get a Pioneer A04 - They are superb!
2. By the sounds of things, when you get your modchip you do not want to patch games. If this is so then get a Messiah or Magic II. I would recommend Messiah. You do not have to patch anything nor do you have to bother with a Gameshark or Action Replay. It doesn't need a boot disc. Everything boots like it was an original disc. If you were to get another modchip (don't) then you would only have to patch EA games using PPF-O-Matic 3.
3. For full depth backing up advice go to PS2 Place at:
www.mjpaul.freeserve.co.uk . It will be on the net in the next couple of days. To anyone else - sorry for the delay. Having problems with pictures. Sorted now, ready for upload.
All your questions should have been answered throughly. Hope this helps...