Although my son has a modded XBOX, I have never actually tried it to do what you suggest, but an experiment with a DVD+RW should answer the question for you. I might give it a go later.
I have a DVD player that reads multimedia files, such as MP3, MPG and AVI (DivX), and it lists the actual file names on screen to be selected, so I guess MP3 capable CD players would do the same. The tags etc are part of the file header in MP3 so the file system used does not really matter. An MP3 file stored on a DVD in UDF will retain all its information if copied to a CD in ISO format, (or indeed onto a HDD in NTFS or FAT32)
I think your only concern is whether the hardware devices are capable of using the UDF file system. DVD players certainly can, others I am not sure, but if future devices prove not to, then you can at least copy them from the UDF disc to an ISO, even if you have to reduce the length of the filename.