If memory serves, that's a yes, but... situation. I have a Japanese Dreamcast myself so I know it can play burned discs of any region* (but not originals), but if I'm remembering things right there were also later models that could not play burned discs period. (Of course, if you're handy with a soldering iron you can install a multibios, making it a non issue)
* I'm not entirely sure about PAL games because I haven't labeled the burned games properly. Either way they are the English versions.