CD-RW discs have taken the idea of writable CDs a step further, building in an erase function so you can record over old data you don't need anymore. These discs are based on phase-change technology. In CD-RW discs, the phase-change element is a chemical compound of silver, antimony, tellurium and indium. As with any physical material, you can change this compound's form by heating it to certain temperatures. When the compound is heated above its melting temperature (around 600 degrees Celsius), it becomes a liquid; at its crystallization temperature (around 200 degrees Celsius), it turns into a solid.
In phase-change compounds, these shifts in form can be "locked into place": They persist even after the material cools down again. If you heat the compound in CD-RW discs to the melting temperature and let it cool rapidly, it will remain in a fluid, amorphous state, even though it is below the crystallization temperature. In order to crystallize the compound, you have to keep it at the crystallization temperature for a certain length of time so that it turns into a solid before it cools down again.
In the compound used in CD-RW discs, the crystalline form is translucent while the amorphous fluid form will absorb most light. On a new, blank CD, all of the material in the writable area is in the crystalline form, so light will shine through this layer to the reflective metal above and bounce back to the light sensor. To encode information on the disc, the CD burner uses its write laser, which is powerful enough to heat the compound to its melting temperature. These "melted" spots serve the same purpose as the bumps on a conventional CD and the opaque spots on a CD-R: They block the "read" laser so it won't reflect off the metal layer. Each non-reflective area indicates a 0 in the digital code. Every spot that remains crystalline is still reflective, indicating a 1.
As with CD-Rs, the read laser does not have enough power to change the state of the material in the recording layer -- it's a lot weaker than the write laser. The erase laser falls somewhere in between: While it isn't strong enough to melt the material, it does have the necessary intensity to heat the material to the crystallization point. By holding the material at this temperature, the erase laser restores the compound to its crystalline state, effectively erasing the encoded 0. This clears the disc so new data can be encoded.
CD-RW discs do not reflect as much light as older CD formats, so they cannot be read by most older CD players and CD-ROM drives. Some newer drives and players, including all CD-RW writers, can adjust the read laser to work with different CD formats. But since CD-RWs will not work on many CD players, these are not a good choice for music CDs. For the most part, they are used as back-up storage devices for computer files.