Most PCs have a BIOS key that reformats your PC to Out-Of-The-Box (like HP and Dell). If you got from a store. But if it is a custom build you need the CD. Go to your PC's website (www.dell.com www.hp.com) and find your model, that will help.
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There are many ways. However, you can create an .iso or .bin file from the CD and mount it on your computer virtually.
No you can't update the Sims 3 without CD because when you're updating you are going to save the update in the CD.
You can buy the CD of Bugdom at a store. You can also go to http://www.pangeasoft.net/bug2/downloads.html to play a demo. Hope this helps! :)
apps.com gamestop.com and itunes.com
When you put your CD into the computer, it should say to "install" in order to actually play House Party you must install it into your computer.