I have a LG model 8160B 16X10X40X CD-Burner. I am using Windows XP (SP1) Today I tried to format one fo my 700 MB CD-RW disks so that I can use the Drag n' Drop mode for EZ CD Creator. However after I formatted the CD, it said that I had a total of 570 MB of total space on the CD. I said to myself. "Okay. This is not right, that number should be 700 MB." I tried it with a different CD-RW disk, but it said the same thing. Then I tried it on my 650 MB CD-RW disks that were brand new out of the package, and it STILL said the same thing. I was using Easy CD-Creator 5 and then I upgrade to version 6. It didn't resolve the issue. So I updated the firmware on my CD-RW to the latest version (latest to the date of this post) and THAT didn't work either. So I formatted my entire hard drive, and reinstalled windows. I tried it again and it still didn't solve the problem.

I also tried using the latest version of Nero Burning Rom to format the same types of Media. (of course disabling Easy CD Creator software FIRST) However when it finished formatting, the media came up to be 0 bytes total free space. What is the problem here?

Formatting has overhead (used space) On a 700Mb disc, 570 is about right, 530MB on a 650 MB disc. Just one more good reason to avoid UDF formats.

Then how am I support to format this disc properly? I want to beable to use my CD-RW disk in the same way as I use a floppy. Drag and Drop, editing files directly on the CD-RW disk.

After formatting, 570 is the correct amount of free space. The formatting is not done by Nero, (or by EasyCD), but by InCD (or DirectCD).
Suggest you refer to the respective manuals, but once formatted, you just use Explorer to drop files onto the disc.