This is very useful functionality, but with all due respect the UI here is a bit of a mess. My specific suggestions/requests:
1) As implemented and described here, "Open in Current Contact Sheet" adds images from a folder to the current sheet. But the Pref settings under the Launching tab use equivalent language ("Frontmost" instead of "Current") to refer to replacing the contents of the topmost sheet with those of the selected folder. This is logically inconsistent. (Also, I prefer "Current" to "Frontmost", but that's semantics. However the terminology should be consistent throughout the app unless there is a technical distinction between the two.)
A better design would be to have three "Open" options in the Navigator's context menu: Open in new Contact Sheet, Open in current Contact Sheet, and Add to current Contact Sheet. The first one would behave as-is; the second would replace the contents of the current sheet (to be consistent with the Launching prefs); and the third one would do what the second one does right now.
2) I think I understand how it is supposed to work, but the "Parent folder hierarchy" in the "Burn Photos to Disc" dialog can yield awkward results if there are more than two nested levels of folders. In my case, an abbreviated version of the folder layout is as follows (folders denoted by trailing slashes):
Project Title/
Date+Location1/
Sub-event1
image_1.jpg
image_2.jpg
image_3.jpg
image_4.jpg
Date+Location2/
image_5.jpg
image_6.jpg
... but if I try to burn the entire contents of the project to disk, I am limited to two levels of hierarchy, so the result is:
Date+Location1/
Sub-event1
image_1.jpg
image_2.jpg
Project Title/
Date+Location1/
image_3.jpg
image_4.jpg
Date+Location2/
image_5.jpg
image_6.jpg
The problem here is that stuff like Date+Location1 gets split up, resulting in a hierarchy on the CD that is fundamentally different from the one on the hard drive. I'm not sure if there are formal human interface design guidelines to address these types of questions, but it just feels wrong to me. Is there any reason why one of the options in the Burn dialog can't be "Preserve existing folder hierarchy"? Or, as an alternative, that there be a user-specified root level (which effectively defines how many levels of hierarchy are needed to cover all selected images), such that all (selected) images at or below that level are written to disc with parent folders preserved?