If you have a Labelflash recorder, you can print a label on the label and/or data side of the Labelflash DVD. A Labelflash DVD has a special layer between the top and bottom layers; this layer can be heated by the laser in the recorder so that images and text can be printed on the DVD.
The interface in the Burn Label screen works on the same principle as Nero CoverDesigner. Basically, it is irrelevant whether you print the label on paper or directly onto an appropriate disc.
Labelflash is a technology with which pictures and texts can be burned on the label or data side of a disc with a laser.
A label refers to a label on a disc. Some drives, e.g. drives that use LightScribe or Labelflash technology, can transfer labels directly to special media.