Yes. Click on "New Image" in the tool bar (or under the menu File->New->Blank Disk Image. It will let you select the size from a list of presets or custom. Make sure it's set to read/write.
If you just want a place to put items to burn later, you can create a "Burn Folder" in the Finder. Just drag items you wish to burn into it and when you're ready, you can burn a disk from the Finder.
edit: whether it's burned as DVD+R or -R is decided by the media later