I'm not a pro, and don't sell my images, but...
Aren't there contracts involved here?
Without knowing the terms of the contracts, how can you comment on why
or for how much those CDs of images cost the buyer?
When you say, "give away", do you actually know that? What do you mean
when you say, "I have been questioned as to why i am charging when
another photographer is not."? Is that other photographer really
giving away his work? Or did the client pay him for it?

You're asking questions that seem to indicate that you're making a lot
of assumptions.

 More information about the jpegs might help explain (or not).  How
long was the shoot and how many images were shot?  If the number was
very large, they might have had to have been processed (greater
compression and/or reduced resolution) to fit them on a single CD.
Then they wouldn't be the highest quality, and of lesser value,
somewhat like "proof" prints, although for different reasons.

 This CD, unlike those sold commercially, entailed virtually no
extra work, and as its contents came from a single shoot, the
photographer's effort was minimal, not taking up months or years to
accumulate salable shots.  If the photographer gives away CDs of
*all* of his/her shoots that's one thing, but I suspect that this
was an exception.  It that sense it might be used as a form of
advertising, getting the name out and possibly generating future
sales.  Also, unlike a commercial product having maybe a dozen or
two of excellent shots, this CD might have contained a motley bunch
of several hundred images, some good, most mediocre, and lots of
near duplication.  If the contents were to be later examined for use
in a commercial product, maybe 3 or 4 of the hundreds would be
selected.

 The amount of time, energy and expense that you put into each
image you offer for sale is probably far higher.  The cost of a CD
is irrelevant and shouldn't be used to set prices.  Mine only cost
about 15 cents each.  The packaging alone is worth more.  If anyone
tries to reduce your rates based on the low media cost, either
reduce your price by 15 cents and tell them that they're not being
charged for the raw materials, or ask them why they can't buy
commercial music CDs in stores for 15 cents.  Supply and demand
works here too.  Sell only 5 copies of each image and the cost will
be far higher than if you intend to sell thousands of each.  Did the
other photographer give away 5 CDs or perhaps hundreds or more?
What he/she does should have no bearing on what you charge.  There
are too many other variables that differentiate what the two of you
offer.

 A4 prints cost far more, so if any are given away, they're more
likely to be closer to snapshot size, with perhaps an ad printed
across the bottom. :)

my opinion:

If an artist wants to give away his work he is completely free to do
so. Of course if I give away my couch, I'm hurting someone who sells
couches. I've given away litho's, prints, negatives, slides many
times.

If you can take a better shot than me, then people will buy yours
rather than take mine for free, if they appreciate art anyway.

I have a few prints that sell 2 or 3 a week, plus the 30 or 40 I have
in storage that I give away regularly to people I meet.

I'm not producing other peoples work and giving it away so I'm really
not hurting anyone but me financially. I'd love to be able to afford
to give away all my prints, that would be a great legacy.

(in my opinion anyway)