What are the specific steps that one must take  (along with any other
considerations)to compile a music CD featuring already released songs?
This music compilation CD is to be used as a fundraiser for a
non-profit organization which promotes music and music education in
the states of Virginia and West Virginia.  All songs will be from
already released material by recording artists who are natives of
these states.  Specifically, I seek detailed information about the
legalities involved, who to contact to secure rights to use, what
costs are involved and any other information pertinent to steps for
production and release of the music compilation CD (or cassette tape
version).  Basically, I need the kind of information about the process
which could be obtained from a recording studio or record label
company who does this work on a continuing basis.  I basically want to
avoid the time it would take to personally make contact with such
enterprises to educate myself about this process.  Your answer should
be a detailed step-by-step process and explanation with specific
details including applicable regulations and other requirements
presented in layman's terms.  I don't need to fully understand
technical or legal principles; I just want what is necessary to
competently and legally produce and release for sale a music
compilation CD/tape product.

Dear jgd:

What you are seeking is called a mechanical license.  This is specific
kind of right granted by the copyright holder or its agent to make and
sell mechanical reproductions (CD's, tapes) of the music in question. 
The leading source for mechanical licenses is The Harry Fox Agency
(http://www.harryfox.com/).  Harry Fox has a new feature called
SongFile (http://www.songfile.com/) that contemplates mechanical
licensing rights for 2500 or fewer copies.

This assumes Harry Fox has rights for the songs you want to compile on
the CD.  While HFA has a broad repertoire, they may not have the
specific titles you wish in their catalog and so could not grant a
license.  If that's the case, you will need to contact the copyright
owner directly (see http://www.copyright.gov/circs/circ22.html) and
negotiate a mechanical license.  Such licenses (including those
through HFA or SongFile) usually contemplate a per unit license fee
(royalty).