The cue file
Cue files define the structure (track organization) of the CD. As iso files can't hold CDDA data, cue files are necessary to indicate which files to use and how to the burning software.
FILE "Game - Track 01.iso" BINARY TRACK 01 MODE1/2048 INDEX 01 00:00:00 FILE "Game - Track 02.wav" WAVE TRACK 02 AUDIO PREGAP 00:02:00 INDEX 01 00:00:00
Note: the 2 seconds pregap is important.
The iso file must include the necessary files and respect the game CD structure.
The CD has to be burned in "mixed mode" or "game mode" (files + Red Book compliant audio tracks).
There is a higher chance of obtaining an unreadable disk on the NeoGeo CD if written at high speeds. Burning average quality disks at 1x~16x speed is recommended.
Some iso packs have their audio tracks encoded in MP3 to reduce the archive's size. The MP3 files have to be decoded to 44100Hz 16bit stereo WAVE files with an audio file editor or converter. Some burning software can automatically do the conversion.
Nero and some versions of Nero Express should accept cue files and burn the iso and wav files right away.
In case of an incompatible burner or software issue, an alternative way consists of using Daemon Tools to mount the cue file as a virtual drive, and use CloneCD to make a copy of it to the real drive (in "Game CD" mode).
It is possible to be able to read a burned game CD on a computer drive, but have troubles having it recognized by a NeoGeo CD (no "PUSH START", no audio tracks...).
Make sure that the CD contains the right data, by loading it in the Nebula emulator for example.
If the data is correct, try burning it at a lower speed, use another CD-R brand, don't use CD-RWs...
If nothing does it, the CD drive might be tired.