Your friend is right, they will fail. But the question of when is a big unknown. I too have researched the problem and found out a lot, and also from first hand experience. There are so many factors involved. Such as, quality of the disc, speed of burn, storage enviroment. I mainly deal with DVD's but some CD's also. I remember always reading disc will last 100 years, but you no longer see that in any info. Hard drives have come down in price to where it is as cheap as buying disc and cases to put them in. I have had several video disc to become unreadable within several years. These were stored in a climate controlled space, in a closed case. But I must also mention, these were cheaper off brand disc, I no longer use such.
You can google info such as dvd rot, http://hometheater.about.com/cs/dvdlaserdisc/a/aadvdrota.htm
Home burned disc are different than factory disc, and usually home burned are more likely to fail sooner. If its something you really want to keep for the long haul, use quality disc, burn at a slower speed, and back up to a hard drive. I have had the best luck with Verbatim disc, they seem more consistant with quality than other brands, even big name brands. More cd data here>
http://www.loc.gov/preserv/studyofCDlongevity.pdf
One more thing to note, cd's and dvd are different in that the top of the cd is very sensitive to sctatches, most people think the bottom, or burn side is. On a cd, the top is a reflective cover, much like a mirror, scratch the front of a mirror and you might be able to polish the scratch out, scratch the back of a mirror, and its ruined. Also, never ever put labels on a disc, and be careful with what you use to mark them. Hope this helps. I learned the hard way.

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