Am not yet versed with the inards & workings of LMCE, but i should imagine it maybe a mater of modifying the code/applet that run upon "new media insert" event handler, so that it can scan the type of CD/DVD thats been inserted, the contents and maybe go through the contents and find playable media.
For example if CD/DVD contains photos, it would be nice to then start a photo/import/slideshow wizard of some sort, secondly if its Music Jukebox CD/DVD (contains mp3,mp4,ogg,flac, etc) then it plays that.. and for video the same.
As you might already note, this is not as trival a task as it seems at first. many people backup their DivX movies on a CD/DVD by just burning a couple of folders onto a Data disk. thats fine, but the LMCE will need to scan the folders for subtitles, cover-art etc..
if I'm pointed in the right direction, i would mind working on this..