Which CD side to touch the plastic sleeve?

Label side is seen through clear vinyl/data side touches soft fuzzy side.
You can't read the labels if you place data side away from soft protective surface.
But.....I do not trust anything accept original jewel box cases.I have seen silkscreen label side from various cd makers adhere very strongly to clear vinyl and damaging cds.Summer weather can cause this in cars or elsewhere.I advise against taking cd's into automobile due the more extreme hot/cold varients,make cd-r copies for the road if able.If you can't then keep them in original jewel cases and 'always'take them with you.If you gotta have portable transport then use the hard cases with flipping plastic flaps which hold the center spindle hole of the discs.Take this as advice from a guy who ruined 200 cds using those photo album style cd holders.

Whichever way you put discs in a sleeves you run the risk of damaging them. Nothing should ever touch the underside of a disc. Put a disc in a dirty/gritty sleeve and the problem compounds. When discs are packaged on spindles they are separated from each other (only the inner part of the discs touch each other) and when cds are packaged in jewel cases nothing touches the underside. This is not by accident.

If you must use sleeves, though, i would put the playing side against the cotton as long as it always stays perfectly clean as it can trap dirt easily. I think the product illustration you mentioned is typical in advertisements and such. Whenever i see an ad for a cd player or a cd related item the disc is usually photographed with the underside up. I guess they think it looks cleaner/nicer/cooler to have the shiny side up instead of a brand name or a band name. I guess you could say that the underside of a disc is more photogenic.

I agree with Clbeans.

I had a cd-storage thingie in the car a few years ago. You know, the kind that goes over your visor. In the heat, it reacted with the cd's and ruined each and everyone of them.

KP