Hahaha! Not meaning to laugh at the situation but I know all too well the "tossing and turning in bed and then deciding to work on the computer until the wee hours of the night" thing.  I can't tell you how many all-nighters I've pulled...not because of school...but because of me tinkering around with the systems here.

I know the first thing I tried when I got my first burner was to make music compilations for myself.  I don't know if Nero comes with a feature that let's you grab music tracks from CDs because I use Audiograbber for that purpose.  It's a nice shareware utility for $20 that'll grab music off discs and even converts them to MP3 format if you want to...provided you get the right encoder.  I would recommend getting the LAME 3.88 encoder that was released.  It encodes a CD track to MP3 format in about 1 minute...very fast compared to what I used before.

If you have MP3's that you would like to burn to a CD and play on a regular CD player, then you can just use Winamp to convert the MP3's to .WAV format and then burn them on the CD.

For napster alternatives, there was a thread in the General section that listed some other Napster alternatives.  I use Music City.com and their Morpheus client.  It works just like Napster.

Let me know if you have any questions regarding burning the .wav files or how to convert the .mp3 to .wav.