Disc Rot a/k/a Bronzing, is a condition where a chemical reaction will cause the data embedded in a CD to become scrambled, rendering the CD unplayable over time.
This is not an industry-wide problem; rather it is limited to CD's pressed by PDO in the UK during a specific time period.
An example of two copies of Steroid Maximus' Quilombo CD release - one with rot evidence, the other without:
Disc at top is not rotting - notice clarity
at edges.
Disc at bottom suffering from rot - notice
discoloration at edges, creeping inwards. If there were no printing
at all on the disc, the creeping rot would be noticeable as unevenly working
its way inwards from the outer edge. It is plainly visible, however,
in the unprinted areas of the disc, which ought to appear silvery - instead
these areas appear brownish near the outer edges, gradiating to silvery
the further towards the center we look.
Other CD's that might be suspect are the Some Bizzare UK pressing of Hole, other Big Cat pressings of the same era, some Nurse With Wound releases, and so on. It is important to reiterate what is stated on other pages, in that the overall yellowish tinge characteristic of some PDO pressings (i.e.: Wiseblood's Dirtdish CD) is not an indication of disc rot. Disc rot is more of a brownish color and not entirely even across the disc, as the yellowish color of unaffected CD's is.
There are a few pages that discuss this problem in more technical detail - rather that repeat what is stated elsewhere it is suggested that you visit these sites, to find out more about disc rot / bronzing, and what recourse you have in the event you own a rotting disc:
The Koussevitzsky Recordings Society Journal reports on CD bronzing.
Foetusized's site includes info as well as images of a rotting copy of Steroid Maximus' Quilombo.