I have done some research and have found that the original xbox CAN play recorderble CDs and DVDs, depending on what brand of disk drive it has in it. The four different brands that xboxs can come fitted with are Samsung, Thompson, Phillips or Hitachi/LG. Apparrantly the launch xboxs had Thompson drives, which are the least reliable and the least compatible with recorderble media. Most people think the Samsungs are the best, and they seem to be the most compatible.
I am unsure what drive my xbox has, but it was quite a late model purchased in April 2005, so it probably has a Samsung. I have played CD-RW, DVD-R, and DVD-RW formats on it with no problems. I have copied Mp3 files on to a disk and the xbox plays them just like any other CD. They also work fine through Music Mixer.
I have made copies of DVD movies on to both DVD-R and DVD-RW formats and my xbox plays them with no problems.
For more information you can view these forums:
http://forum.teamxbox.com/archive/index.php/t-259453.html
http://forum.ecoustics.com/bbs/messages/2/113987.html
http://www.pcuser.com.au/pcuser/hs2.nsf/lookup+1/8D3DDB5BE01F49A3CA256EA6002D2FE0