CD-RW media cannot be read by CD-ROM drives built prior to 1997 due to the reduced reflectivity (15% compared to 70%) of CD-RW media.
CD-RW drives and media are more expensive than CD-R drives and media. CD-R is sometimes considered a better technology for archival purposes as the data cannot be accidentally modified or tampered with, and encourages better archival practices.
Standard prerecorded Compact Discs have their information permanently stamped into an aluminium reflecting layer. CD-WR discs have a phase-change recording layer and an additional silver (aluminium) reflecting layer.
A laser beam can melt crystals in the recording layer into a non-crystalline amorphous phase or anneal them slowly at a lower temperature back to the crystalline state. The different reflectance of the areas make them appear as the 'pits' and 'lands' of a standard CD.
Based on a FOLDOC entry