I think I know why. I've got this error before. The trick is not to select (left click) the special drive letter that the Panasonic driver created before formatting. Otherwise the silly thing won't let you format the disc because you are currently browsing it.
Follow these steps and see if they work for you :
1. Put DVD-RAM disc into drive
2. Wait for light on writer to stop blinking
3. Click on some other drive other than the special drive letter created by the Panasonic driver (e.g. your hard drive)
4. Right click on the special drive letter and select format
5. You should now be able to format the disc
Before you do this though, you should probably know that most DVD-RAM discs come pre-formatted. If you are using a brand new DVD-RAM disc, chances are you don't need to format it at all. Just stick it in and start using it.