When I say formatting has nothing to do with erase I am not being completely fair. If you format any media, all data will be gone, so you could erase by formatting. Same thing as with a hard drive, you can format it, or you can erase it without formatting.
DVD-RW does not need to be formatted for normal use. Only if you want to use it for drive letter access, like with Nero's InCD you have to format it first. It will then behave a bit like a hard disk drive, but it will have a smaller capacity and will be unsueable for data compilation programs (Like Nero itself).