Ok...lots of information posted here and lots of questions raised.
First, some background...I work in the archival services industry, mainly specializing in film and video preservation, so i know a little about this subject.
First of all the article referenced by the first post contains a good bit of propaganda...I mean, what does IBM make most of their money off of...not CDs or DVDs. Their money is made off storage systems and computers and software, so of course they want you to back up to something other than CDs
Here is the real truth...there is no perfect archival medium...and possibly never will be.
Of more concern than degradation is obsolesence. The technology becomes obsolete at an incredibly fast pace. As was referenced in some of the posts, it will be difficult, if not impossible to find decoders for the digital file you make today. The only solution is to migrate to the best format available every few years. With this in mind, you need to choose a format that lends itself to migration...ideally a lossless compresion format, or a raw format. Tiff seems to be a good solution for digital images at this point.
Now, onto why CDs and DVDs become unreadable. The main cause of degradation is pitting of the reflective surface in the CD or DVD. Most disks use aluminum as the reflective surface, and if it becomes exposed to air, it will degrade and lose its reflective capacity. the only way it gets exposed to air is if the integrity of the layers of the CD or DVD are somehow compromised...which could actuall happen from the manufacturing process. Unless you test each disk for errors before using it, thereis no way to know for sure if the disk is good, or not. The laser from the drive can't read these areas, causing a loss in data.
There are disks with silver reflective layers, and disks with gold reflective surfaces. I am not talking about disks that are colored gold, but this with an actual gold reflective layer. There are a few companies that make these, including MAM-A (formerly Mitsui). I believe that Kodak also makes gold disks, but am not sure. In all instances, avoid no-name or generic disks and use only well respected brand names. If you can buy 50 and get 50 free, that is a pretty good indicator that these aren't the disks you want.
Backing up to multiple types of storage is absolutely the best solution at this point. in fact, if you can, back up to the same types of storage used in the computer industry, such as SAIT or LTO tapes. The computer industry has been faced with this challenge for years and have designed backward compatibility into their products. In fact, both SAIT and LTO are compatible two generations back (also called n-2, meaning SAIT 3 will play both SAIT 2 and SAIT 1).
So, while there is no perfect archival medium, you can protect your data (photos) by thinking toward the future. Make sure your digital formats lend themselves to transcoding to new formats without additional loss in quality and make sure you back up to multiple storage formats to reduce the risk of loss from obsolesence or your storage medium degrading.
John