There are two ways of writing to CDs so that you can add more files later - packet writing and multi-session.
With packet writing, the CD acts like a big floppy disk and you can add more files at any time. It requires special software, which usually comes with your writing software, e.g. Nero has InCD.
With multisession, you write to the disk on a per-session basis - you save up the files that you want, then write them; later, you can write another set of files, and so on.
Both methods reduce the amount of space available for files on the CD - packet writing by formatting the disk and multi-session by about 10 MB per session.
In neither case can you modify files once they are written; in practice, the file is modified on the PC then rewritten to the CD. The file system then points to the new file. The space used by the old file cannot be recovered until the disk is erased or reformatted.