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.
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.