Designing a cool CD label

1. CREATING THE BASE
Create a circle using elliptical shape tool.

Enable "subtract from shape area" at the top bar. Create a circle using elliptical shape tool.

2. CREATING ABSTRACT EFFECT
Create a rectangle using rectangular shape tool.

From "Filter" menu select "Liquify". Select forward warp tool and distort the shape as shown in the image below.
Press Ctrl+Alt+G to create a clipping mask.
Create a rectangle using rectangular shape tool.

From "Filter" menu select "Distort>>Twirl". Apply settings as shown.
Press Ctrl+Alt+G to create a clipping mask. Change the layer mode to "Multiply".
Create some duplicates of this layer. Scale down, rotate and place as shown.

3. INSERTING IMAGES AND TEXT
Insert a relevant image. Press Ctrl+Alt+G to create a clipping mask. Change the layer mode to "Luminosity".
Duplicate the layer. Scale up and move this layer right above the circle layer in layer order in layer palette. Reduce the opacity.
Select the circle layer. Double click the layer to open layer style window. Apply settings as shown.
Insert text and other details.
With text tool click on the outer edge of the circle and type the matter on a circular path.