I just checked the Sony homepage and it doesn't say anything about mp3's there. And I guess they
would mention this, wouldn't they?
The discman finding and playing track 1 is normal, since the data on a CD-R is stored in one single track. Check how long the discman shows this track to be...
You'll have to convert your mp3's to CDDA before (or while) burning them. Note that this will increase filesize to about ten times, you might get CD-R80's (80mins of music) working on the Discman, however. Most burning software will do the conversion for you.