Later released US systems did seem to have issues with cd-r stuff. Whatever it was to do with it,it wasn't the lasers either,because I tested that out by swapping out lasers onto a first generation US release deck.
Well, to clarify, we aren't talking about "issues", we are talking about total %100 incompatibility. When Mil CD support was dropped, playing anything that wasn't a GD Rom or GD-R was supposed to be impossible.
If a DC doesn't like CD-Rs, but once in a while plays them (or plays a retail Beamcast!, for that matter) then its trouble with CD-Rs is unrelated.
I was working at EB when the DC died, and I saw loads of people buy $49.99 DCs just to play boots, and never once had a guy complain, and believe me they would. My girlfriend bought one of those Sonic packs that came with a few Sonic games. That one played CD-Rs just fine too.
My DC has had spells where it doesn't feel like booting CD-Rs. Once a friend sent me this home brew compilation on two CDs, and only one of them worked. He said that was odd because they both worked for him. A few years later I tried it again and it worked perfectly.
There are actually guides online that tell you how to play boots and homebrews on non-Mil CD compatible DCs, but they are thought to be fake. I'll believe non-Mil CD DCs exists when I see one, basically.