Your startup disk is the hard drive which contains your system software. The built in 'burning software' on your Mac uses this drive to create an (mirror)'image' of your cd prior to burning it. In other words, when you stick in a blank CD your mac grabs a space equal to a complete CD on your hard drive and uses it to model the CD before burning it. This helps to ensure that you get less errors and save CDs. The bummer is that you seem to not have enough space on your hard drive to allow this. You need to look around for file you don't need and trash them. Your goal should be to keep at least a Gig. of 'free' space on your drive at all times if possible. This will help to allow you to burn CDs and keep you away from crashes and errors caused by applications and or the system fighting for 'scratch disk' space; often utilized in lew of RAM.
The best place to start cleaning out files would be your incomplete downloads directory. Another would be a restart, sometimes 'scratch disk' allocations get 'stuck' and rob you of some room. A great way is to use sherlock or a simple find in the Finder to locate files over 100, 50 then 20 megs in order to locate large files that could be deleted. DO NOT delete any system files or anything you don't know what it is, unless it has a familiar 'tif', 'mp3', 'mpg', 'jpg', 'mov', 'avi', 'sit', 'dmg' or other file type you know isn't vital to your machine or it's applications.
Once you've enough room (a gig or more), start burning your CDs, move as many files to CD as quickly as you can after gathering them; this allows you to delete them from your hardrive later without remourse in order to make room for new files and leaving room to create new CDs.
You can always of course buy another hard drive, or another burning app such as "toast". There is no need to do so, but those are obvious options as well.
Good luck