What versions of my photos should I back up: RAW originals, edited files, or watermarked exports?

I would suggest backing up three things:

1. The original RAW files.
2. Your RAW software's database of adjustments — usually, this is kept as lossless storage of what changes you made.
3. High-quality (100%-quality JPEG or TIFF, depending on subject matter / detail) of developed images you've put a lot of work into.

#1 keeps the originals. #2 lets you recreate your changes, as long as the software is available. And #3 preserves your work in the event the software isn't available at some point far in the future.

Because almost all RAW files can be read and processed by open source software, the concern with #3 isn't that they'll be unreadable, but that you won't be able to apply identical edits. Twenty years from now, your preferred RAW processor may no longer run, and even if newer software reads the edit instructions, the algorithms used may change, leading to different results.

Of course, some of this is personal. Some people might not bother with #3, because they're not too worried about that. Others might take the borderline-heretical approach of keeping only the converted images — treating them as final artifacts from a point in time, and not planning to go back.

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For the issue of whether DVD/CD is a good idea in general, I'll point to What method is best to take backups of your digital photos? — these days, I think a combination of external magnetic media + cloud storage is probably the best, but the above really applies in any case.