you can do drag and drop because you have some sort of "packet writting" software installed. In this kind of situation, computer just treat CD/DVD as a big floppy disc and you normally need to format disc before you use it.
packet writting software: Roxio use DirectCD, Nero uses InCD, NTI, FileCD, Sonic DLA, I do not know others
as for overwrite, yes new file overwrite old becuase it is the same as a flopy, small difference for R and RW diskcs, for RW discs, file is overwritten so space are reused, for R discs, old files are destoryed and new files written and the space used by old files is wasted because R cannot be re-written
only disadvantage I see in this method is that all packet writting softwares are incompitable, so the CD you produced in you PC cannot be read in another PC unless another PC has the same software installed or you have closed (finalised) disc.
by the way: CD/DVD disc used in computer can only be burnt, so it is alway burn no matter what method you used