I see that someone else has figured this out. But since I also went through the agony of discovering it myself, I feel compelled to go through it again, step by step. In case anyone is as dense as I was:
(I notice that the person who had the solution says that you should select a playlist, rather than a playlist folder. My situation was the opposite. If that doesn't work for you, try this...)
Pull down New (BUT. Click on Playlist Folder, NOT just Playlist).
Down the left hand side below are a number of Playlists listed (1 through 20 on my iTunes, for some unkown reason)
Open one of them
Drag item to be burned onto this
Go to File and, EUREKA!, "Burn this disc" appears.
It should have been easier. But I'm thankful for small favors.