iTunes makes it very easy to create a custom playlist or album. Simply create the new album, and drag titles from your main Library into your new album. And since it isn't actually making a copy of the audio file (rather, it is simply creating pointer files to the original), you can really be as creative as your imagination allows. When it's time to cut a CD and make a professional-looking case, iTunes is there to help with that.

Once you are done creating your custom album, highlight the new album and then go to File | Print... You will see a dialog box similar to this:

As you will notice, there are many options for making your CD case cover or label look just the way you want it to. One thing that you will find in common with all of the available layouts is that iTunes automatically extracts the title, artist and the length of each file, and inserts that information into whichever layout you decide to use. This is great for using as a reference guide later.

Browse through the layouts, and when you find the right design and layout for you, press "Print", and off you go. The particular layout I chose in this case also automatically imported a cover from one of the included titles. I chose to use that cover for the cover of my new personalized Christmas album. Here is what it looks like:

From here, I simply cut on the pre-printed lines, and fold in the middle. Doing this manually would have taken me about 30 minutes. iTunes allows me to do the same thing in about 15 seconds.