How do I prepare and use cd-RW for writing erasing and rewriting files?

Have you used a normal cd-r? It's basically the same thing. Only difference is that cd-rw allows you to reformat the cd and write over it with other content.

If you haven't used a cd-r...

Insert cd

Sometimes, the computer will give you a popup saying "you've inserted a blank cd...what do you wanna do with it?" and you can go from there

If it doesn't, go to MY COMPUTER

Double click on the CD drive

Drag files in there (only 700 mb as most cd-r/cd-rw are 700 mb) and then on the left, it should say "write files onto cd"

CD/RWs need to be formatted for packet writing, unlike CD/Rs which can be burned without prep.

What burner software do use?

Tnx
I Use Nero. How Do I Format It And Then How Do I Use It?

Try using Nero's own tutorials:

NERO TUTORIALS (http://www.nero.com/enu/support-tutorials.html)

Lookup CD/RW in Nero help or use the link JB posted. Once formatted, you can use the Disk as you would use a floppy.