This is a very interesting development, and I can see a lot of potential uses for this sort of technology. Here’s a quote from the email I got:
Sell CDs manufactured on-demand in your CafePress.com for free. The CDs show up in your store just like any other product. Audio CDs include audio samples so your customers can hear your content. Data CDs allow you to add data such as software, photos, clipart, documents, books, etc.
Coming soon: CafePress Publishing!
I’m guessing from the coming soon promise that they’re going to offer a similar process in the future for books and such. Wow.