You only need to format the disk if you want the disk to look like "a drive letter" to other software (for example, if you want to use Windows Explorer to copy files by dragging-and-dropping). If you use Nero or Easy CD Creator to burn an image to the disk, then you do not need to format it; you can use it just like a CD-R.
To answer your other question, yes, since it is a RW disk it can be re-written. If you formatted the disk, you can overwrite files or erase files as required. The disk will work just like a very large floppy drive. If you used Nero or Easy CD Creator to burn an image to the disk, then when you want to re-use the disk, you can either erase it, or create another session just like a CD-R.