Well, yes and no Charles.

You can link to any sound file regardless of the type, as long as the
computer's sound player can understand the format.  You are  probably
thinking of embedding sounds into a presentation, where there is a
quasi-limitation of WAV only format and, even then, only below a
user-defined size limit.

Sounds can be placed into presentations in a number of ways, slide
transitions are just one of them.  You can also: Insert => Sounds => From
File from either the Master or the Slide itself.  You can insert the sound
object also.  Each method has good points and bad.

It has been my experience not to trust the sounds from CD.  I would rather
rip the sound to an audio file, place that file in the same folder as the
presentation then link to the file, rather than rely on the users set-up.
If the drive letter for the CD audio disk changes on your system or is
different between systems, then often the sound link will be broken.

I hope this helps.

You cannot put music from CDs playing in presentations because only .wav is
allowed. If you go on slide one, click on the Slide Show menu, select Slide
Transition and go on the Sound menu. At the bottom, click on Other Sound...