First of all, you're lucky you didn't ruin your microwave. Never, ever ever ever ever put anything metallic in a microwave in such a way that it touches the inner walls (floor & ceiling) of the microwave.

Second of all, congrats on the light show. What you did was basically nuke the inner aluminum platter, which wasn't a very bright thing to do, but is very pretty to watch. Each CD is designed to have a Polycarbonate layer underneath an aluminum platter (the junction of the two is what creates the bits which hold the information stored on the CD). On top of this layer is a thin acrylic layer, which anything which is written on the CD face is placed on. Microwaving the CD ruins this middle aluminum level, because, as I'm sure you're now aware, aluminum is an excellent conductor of electricity.

Any metal placed in a microwave is subject to arcing. Whenever you cook something in the microwave, the microwaves bounce all about the walls, and when it hits molecules in the food, it causes them to vibrate, generating heat. However, when metal is placed in this type of a field, the microwaves are disrupted. The air between the walls of the microwave and the metal object become ionized, which serves as a perfect conduit for electricity. This is arcing, and is why you saw the pretty light show. Further exposure to this type of arcing would not just produce a pretty electrical light show, but would be followed up by the distinct aroma of burning plastic, as the heat generated by the arc burns a hole in the inner walls of the microwave

Next time you do this, make sure to have handy a fire extinguisher, and a spare microwave.