Okay, first I will descirbe what happens with a damaged CD (if you mean it's scratched). Well... that was stupid, it's pretty simple, all a scratch is is taking some of the plastic off of the _cover_ (will explain later) of the foil. This in-turn distorts what your CD-reader will read, making the CD hard, or impossible to read or play. Now, as to the cover, all the plastic on the CD is, is a cover for the foil in the middle, which is where the electrons are configured to store the information.
SCRATCH THAT I was just looking for somehitn to describe it, and I've found it to be different from what I've said. What happens, is a laser actually
. So, again back to what I said before, when you scratch your disc, this scrambles up what the laser will read, because it's not a direct reflection to the CD-ROM drive. So, all you need to do is re-finish the plastic (make it all flat). You can buy something for this at many stores, such as Best Buy, or Circuit City, etc.. Oh, and heres the post of where I got some of the info I told you:
http://top40.about.com/library/weekly/aamp3cdburnerworks.htm
Make sure to read the differences from burned CDs and store bought CDs.
-SkyHi
PS-Hope this helped