I've seen a mod where someone's put a slimline CD drive in the A1200 desktop and sprayed the case metallic red. I can't remember if they had transplanted the motherboard into an A500 case though...
As for burning CDs on '030 - you'll need a Blizzard 1230-IV I'd say. SCSI is a lifesaver on '030 since it uses less than 5% of your CPU time due to DMA. MakeCD has an option to burn CD tracks to disc simply by giving it an MP3 file but that will be too slow 'on-the-fly' with an '030.
However, burning CDs needn't be real-time as you can first make an image file then later burn this to CD at full speed (since your hard disk will send it straight without the CPU having to work out things). I've heard of problems with PowerFlyer but with SCSI it's hassle free.
Playing DVDs is out of the picture, as is movies on '030. Your only hope of real time video is Commodore's own format CDXL(?) and earlier AVI/Quicktime files. MPEG, due to it's compression, is only really possible full-screen on '060+GFX card.
The Amiga CD32 could play full motion video on '020/14 with an optional FMV Video-CD cartridge and you can burn Video-CD with MakeCD+VCDGear, but you'll only be able to play these discs back very jerkily with a registered copy of Frogger. Best bet is to get a 30 GBP DVD player for playback if you don't want to buy a big box Amiga.