Live File System is the term Microsoft

Microsoft

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

 uses to describe the packet writing

Packet writing

Packet writing or IPW , is an optical disc recording technology used to allow write-once and rewritable CD and DVD media to be used in a similar manner to a floppy disk from within the operating system, i.e., it allows users to create, modify, and delete files and directories on demand without the...

 method of creating discs in Windows Vista and later, which allows files to be added incrementally to the media. These discs use the UDF file system.

The Live File System option is used by default by AutoPlay

AutoPlay

AutoPlay, a feature introduced in Windows XP, examines newly discovered removable media and devices and, based on content such as pictures, music or video files, launches an appropriate application to play or display the content. It is closely related to the AutoRun operating system feature...

when formatting/erasing a CD/DVD -R or -RW.

Compatibility issues

Older Windows versions do not have support reading the latest UDF versions. If users create DVD/CDs in Windows Vista using UDF 2.50, these may not be readable on other systems, including Windows XP and older Apple systems unless a third-party UDF reader driver is installed. To ensure compatibility of disks created on Windows Vista, UDF 2.01 or lower should be selected.