Recycle. CDs, DVDs, and their jewel cases can and are being recycled. While they are generally not recyclable through local drop-off or curbside programs, there are a few well-established programs that separate and retrieve the various materials and recycle them. Cases and CD's are pelletized, then end up as egg cartons and automotive parts.
If you are concerned about proprietary data on the discs, you can cut them with a ordinary household scissors, or place them one at a time in a microwave oven with a small glass of water for 5 seconds on the "high" setting.
in: http://www.worldwise.com/reccdsanddv.html