congratulations! you have discovered something that has been known for years!

seriously, this is nothing new.
this is how i have always made backups because it is so convenient. however, i do not normally play from dvd. 9 times out of 10, i copy the game to hdd first. if you play from the game from this 'DVD video' (UDF formatted backup), you will eventually run into disk-seek-time problems (your games will lag or lock-up).
book-type setting is not required for DVD-R. it will never work in an unmodded xbox, but should always work in a modded xbox (unless you use a brand of dvd-r your particular xbox dvd drive doesn't like)