You are a bit ahead of me and my current project for me to REALLY give any advice here, but I am looking into the same sort of thing right now and will begin the assembly/ production in a couple weeks.
Ink jet probably won't work for reasons already mentioned. I am looking at silk screening onto cardboard CD cases as well as onto the face of a CD. I had discussed this same concept on here some time ago. It's a very old idea, really. Some friends of mine did it with a disc they produced last year, it looks great and they were able to save a bundle because it was a DIY project--which is where I am going with this.
I want to be able to hand the stuff out for free, so obviously I am trying to keep the price as low as possible. One color of ink, one screen for the print job,... and it's looking like I should be able to produce each disc for less than $1.00 which is where I want to be with it.
Some other friends of mine are getting in on the idea, but they are taking it further--getting a cardboard CD holder/ tray that has a fold, a sleeve for the CD and a sleeve for art work--they are making a poster to drop into the one slot and we are doing duotones for all the artwork which will permit us to stick with a total of three inks and just a few screens.
Anyway, to what you REALLY wanted to know... I had done some looking around for the cardboard CD holders and here are a few places I found:
Cardboard CD Sleeves
these folks have white/ off white sleeves out of heavy paper board—perfect for silk screening—at around .10 each in a large quantity.
Cardboard CD Sleeves, Cardboard DVD Sleeves, Cardboard Sleeves - Cardboard CD/DVD Sleeves
another white paper board option, slightly more expensive, but more choices.
CD Mini Jacket with no die cut - White
yet another choice—the best price of for these thus far—but the material its made from is not listed. They have black and white options as well as a die cut circle window (no plastic) option.
Eco-Friendly and Recycled CD & DVD Packaging | GrooveHouse
These folks have the brown, recycled paper type cardboard sleeves, as well as the four panel CD ‘wallets’. There are also 12” LP sleeves available. The prices on these are quite a bit more than the other stuff, but still well below $1.00 each.
Office Accessories
These people have the best price I found on the brown recycled stuff, plus they have a few different options. Four panel, two panel, …
Good luck!!!