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It's not that CDR discs don't work, but that they changed the way the Dreamcast reads the disc, making it more strict on the way the data must be written to the disc.
Of course CDR discs will work on all DCs, but the bootable discs that were burned between 09/00 thru 01/01 (and many that were burned later) will not work on the post-Oct2000 machines. This is because the data was written to the disc images in a way that is now incompatible with the new firmware.
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