According to Computer Hope, inability to complete a format of a CD-RW may result from a faulty CD-RW, a faulty or malfunctioning CD-RW drive, incorrect or outdated drivers for the CD-RW drive or errors within third-party software used to format the CD-RW. Most likely, the problem lies with the CD-RW itself.
While rewritable CDs can only be written over a finite amount of times, this limit is often well in excess of what a CD-RW will be subjected to in its lifetime. Quite often there is damage to the CD itself, be it a small crack, scratch or smudge. This is an easy problem to troubleshoot, since you can always get a fresh CD-RW and see if the problem with formatting persists. When troubleshooting formatting errors, use the formatting capabilities of Windows rather than a third-party CD burning program in order to eliminate variables.
If the computer is unable to format any CD-RW inserted in the drive, check under the Control Panel to make sure the CD-RW drive is recognized by the computer and that the drivers for the CD-RW drive are up to date. If the computer still won't format CD-RWs after all these variables have been checked, the CD-RW drive itself may be damaged.