If you were talking about analog videos such as VCRs, the direct method would have better quality.
Any analog copy is not as good as the original.

This is not true of digital recording.

A digital copy of a digital file is exactly like the original. This is why recording companies are so upset about people making digital copies of their material.

You should copy your pictures to your computer and put everything in the folders you want. Then put these folders into one main folder. When you get all your ducks in a row, then burn the main folder to the CD.

As long as you are just moving and copying files, there is no degradation.

If you open a .jpg file and then save it to the same name or another name, you will get some degree of degredation from the original. How much depends upon you.

This is not true of .TIF files. Even if the .TIF file is compressed, it will always be restored perfectly. Just like ZIP compression.

.jpg files are a special breed. They are compressed files but not compressed like a ZIP file.

They use a "lossy" compression, which means they can change some bits each time the file is opened and then saved. The compression occurs when you Save.

Each time during the save process, you should find a control that lets you select how much compression will occur. Normally, you should set this to the highest quality setting (on a one to ten scale, set it to ten).

You should always keep a master copy of all .jpg files you download from your camera. Never open them and then save them back to the same name. Always save them to a new name.

After I use Photoshop on a photo, I save it to the same name with an X added to the end of the name.
(i.e. horse.jpg is saved as horseX.jpg)