Does the production of music CDs require extra hard disk space?

No, no necessarily. There are two scenarios when producing music CDs:

• CD/DVD Source file:
  If your source files are CDs or DVDs, they'll be copied onto hard disk under Windows temp directory, and then transformed (ripped) into the formats you select. Windows will automatically remove these temp files later
  
• Hard Drive Source files:
  If the source files already are stored on your hard disk, your computers "buffer" will be the temporary storage space during the transformation (transcoding). When your burning session ends, the buffer will go back to the "empty" stage