Scratched CDs can be fixed if you are willing to put in a significant amount of work on it.
First the ingredients:
1 Scratched CD
2 Soft cotton cloths - preferably the type you would use for waxing a car
1 Rotary Polisher (optional)
1 bottle of car polish (not WAX, polish)
1 pack of fine sandpaper - 600 grit
Now, the instructions:
Take your CD and clean it thoroughly with soap and warm water. Don;'t worry. Soap and water will not damage it. Every day Dish-Soap will do just fine. Don't use solvents. Solvents will destroy the CD
Once the CD is clean, grab your 600 grit sandpaper and wet sand the data surface of the CD until it's completely dull. It's very important that you wet sand the CD. Dry sanding it will create a surface that is too rough and permanently damage your CD. if you've never wet-sanded anything don't worry - it's not hard. Just soak the sandpaper in water frequently and/or sand the CD while running it under your faucet. Sand it lightly and try and sand the entire surface evenly. When you are done, the CDs data surface should be completely dull (non-reflective) and have the same dullness across the entire area of the CD. it should also be very smooth to the touch. If there are still scratches on the CD, keep sanding until they are gone and the entire disc is smooth.
After sanding your CD, dry it thoroughly and apply car polish liberally to the data surface.
If you have a rotary polisher, apply polish to the buffer cloth, turn the polisher on hold it upside down. Lightly run the surface of the CD over the buffer to polish the CD back to usable form. If your buffer is an "industrial grade" type, it can potentially shatter your CD, so this method must be employed with great care. Even the cheapo buffers you get at the local k-mart can be dangerous to a CD, so be gentle. Continue to buff the CD, adding polish as it dries out until the surface is shiny again.
If you DON'T have a rotary buffer, grab your cotton cloth and polish the surface of the CD by hand. Doing it by hand requires that you appply a good deal of pressure and, and it will take onsiderably longer than the buffer method. Keep polishing the CD, remembering to add polish when it runs out, until the data surface is shiny again.
Assuming there was not damage to the label side of the CD, when you are done, your CD will be in mint condition.
In case you are wondering, yes, I've done this myself with an old Nirvana CD that I've owned for ten years. Before fixing it, several tracks would not even play all the way through. Afterwards I was able to rip the entire CD to my computer with zero read errors.
Good luck.