From: Vancouver, B.C. Canada
Well it is true that labelling a CD with an adhesive based label can easily lead to an unbalanced disc, I don't think this would really cause any problems. I don't think that the balnce issue would become a problem unless the disc was being accessed at full 40x or faster speeds, and most peope don't do this. For audio CDs, I don't think there would be any problem at all.
As for the labels peeling, that is very rare from my experience (as in, I've never had it happen personally, and only have heard of it happening to a small amount of people). It may have something to do with the labels used, I'm pretty picky about the quality of the labels I use.
If you *DO* decide to only use felt markers, please PLEASE be careful which ones you choose to use! Sharpie markers may not be a safe choice. I am currently testing this possibility, but I won't likely see any results for a couple weeks or possibly months.
Canada; Leading the world in being just north of the U.S.A.