Second, Destroy the Data
Whenever you're trashing something that might contain personal data, always take the time to wipe it clean. For CDs, this can be accomplished with gloved hands, scissors, a hole puncher or, for a more entertaining (and dangerous) destruction, microwave on high for two seconds.

Third, Dubious Re-Use:
The internet is littered with cheesy ways to reuse old CDs. Give people lemons and they'll make coasters, disco balls, clocks and maybe even miniature hover-craft. However, this isn't really helping anyone. At the very least, it's delaying the landfill for another few years. It's fun to play with trash, but this kind of re-use doesn't make much environmental sense.

Forth, Stop the Cycle
As with any article about obsolete materials, we'd be fools not to mention how evil forced obsolescence is. The good news is, nowadays we don't need to buy physical objects anymore. We can download pretty much everything we need straight to our hard drive, consume it, and throw it into the virtual trash can on our desktop. Whenever you can, go digital. But avoid the temptation to burn all your files to DVD. You'll just be staring at them in five years wondering what the heck you're going to do with all those coasters.

CD Recycling Services in the US
NESAR Systems
420 Ashwood Road
Darlington, PA 16115
724-827-8172 

Digital Audio Disk Corporation
Attention: Disc Recycling Program
1800 Fruitridge Avenue
Terre Haute, IN 47804-1788
812-462-8323

And in the UK
The Laundry CD Recycling
Lauren Dean
London Recycling
4d North Crescent
Cody Road
London
E16 4TG

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