Yes burned DVDs work fine with Disc Loaders like Neogamma most of the time. There are compability lists around the internet whet Games work and which not, like that one:http://wiki.gbatemp.net/wiki/GCOS_Gamecube_Compatibility_List. Some USB Loaders also have Disc Loaders build in, USB Loader GX for example (not sure about cfg-Loader at the moment, don't have my Wii at hand).
Some people here in the Forums are working on a GC USB Loader, but that isn't functional yet as far as I know. If you want to launch GC backups from a USB drive WODE is the only option at the moment.