I'll chime in since I know a little about the subject.
First off; _Proper_ backups are no risk to your Dreamcast. With that said it is important for you to understand that _a lot_ of the backups floating around the internet are not "proper".
I'll try to explain the situation as best I can.
To start with you need to understand that the Dreamcast was designed to load data from CDs. Most games were released in GD-ROM format but the Dreamcast's disc drive was also able to load what are called "MilCDs" which were originally used for karaoke software. Several other MilCDs were sold on the retail market, the most well known is the bleemcast series of emulators. All new Dreamcast games are also released in MilCD format.
Backups of GD-ROM games, bootdisks, and all homebrew are also released in MilCD format. The only difference between them and retail MilCDs are the fact that they are usually burned to CD-R.
So why do so many people claim backups are bad for the disc drive?
Well what it boils down to is this; A lot of the early scene releases and releases done by individuals that don't know any better were not properly converted over to MilCD format. The most common error in nearly all releases are files not begin placed in the correct order in backups.
Basically lets say the GD-ROM has the following file order: a,b,c,d,e,f. This file order is optimized so that when the game has finished loading "b" and is in need of the data in file "c" that file should be close to the laser. Now lets say someone converted this game to CD-R but didn't bother to correctly order the files, now the order is: a,f,e,c,d,b. Now when the game needs the data from file "c" after loading "b" the laser will have to move further leading to longer seek times.
In other words if the files are not in the correct order you would expect: Longer loading times, hearing the laser seeking more often, and probably things like laggy loading of menu music and cutscenes.
The second problem with a lot of backups is the lack of a proper dummy file (padding). You see the Dreamcast will always read data faster from the outside of the disc, and slower from the inside of the disc. So if you have a small game (300MB or so) like Marvel Vs. Capcom 2 it is important to make sure that all the game data is at outer edge of the disc. You *could* burn this game like any regular CD and all the game data would be near the inside of the disc. It would work but it would have longer loading times and delayed music if you compared it to the original GD-ROM.
To get around that problem you use what is called a dummy file. This file is basically just a file full of garbage data that is placed at the start of the file order (it should always be the first file). By doing this you push all the important game data to the outside of the disc. This is why you see backups that are around 200-300MB when compressed in .rar format but expand to 700MB+ when extracted.
If your making Dreamcast backups there are several other gotchas. Some are found in all games, other are specific to a few games or one game. All of them require hex editing or using a pre-made tool to get around. There is a lot more to making correct Dreamcast backups than dumping a GD-ROM and packing the data in to a .cdi image.
For that reason I can not recommend making backups yourself to avoid the problems I mentioned simply because the process is far more technical when compared to making PSX/PS2/Other disc based system backups. However if you want to know more here is a good place to get started: Making GDI files bootable on real Dreamcast with perfection.
If your looking to find _proper_ backups for use on your console the author of the tutorial I linked has released several selfbooting backups over the last year or so. There are other people like him that are re-dumping and re-releasing selfbooting backups and doing it properly. So if you can't find a proper dump for the game you seek just keep looking around, no doubt it'll show up soon.
Finally don't worry so much about running the "improper" backups from CD-R. They might have increased load times and cause the laser to seek more often but they won't damage the console any more than playing retail games all of the time. You'll probably go through multiple fans before you have to replace the GD-ROM. I've been using mine non-stop since '99 and have never had to replace or repair the GD-ROM.
