A virtual CD created with Virtual CD Editor and file system can not be opened in editor:

---------------------------
Virtual CD Editor
---------------------------
Error reading the ISO file system.
---------------------------
OK  
---------------------------

The editor can not modify such a virtual CD nor create a multisession CD with UDF file system.

Please use this workaround to create a new virtual CD:

• create a new virtual blank; choose the type of blank you need
• insert the virtual CD you want to modify
• launch Virtual CD Editor
• drag and drop files and folders from Explorer View into the Contents View and modify it as desired
• choose the option to burn the data onto a CD and then select a virtual burner as the destination. Then select UDF as the file system for the medium

Note: Do not edit virtual CDs that are made with non-standard formatting (such as games CDs). If you do, the virtual CD will no longer run properly.

Further information can be found in the knowledgebase article Burning files with large names with the Virtual CD Editor.