The TT2 documentation says:

The META directive allows simple metadata items to be defined within a template. These are evaluated when the template is parsed

That means that the last value assigned to a META item will 'win', so to speak, as the conditional can't be and isn't evaluated during parse-time - change the order of the conditional, and the title should always display "BOOK".

Edit: I experimented a bit with the following template

[% SET type = "D" %]
[% IF type == 'B';
     META title = 'Book';
   ELSIF type == 'D';
     META title = 'DVD';
   ELSE;
     META title = 'CD';
   END;
-%]
- [% template.title %] / [% type %]  / [% template.name %] / [% templa
+te.modtime %] -
[% META title = 'LAST' %]
[download]

and ttree to test my hypothesis, and I seem to interpret the documentation correctly:

- LAST / D  / test.tt2 / 1178881986 -
[download]