In this theory material from interstellar space can be dissolved, ionized and vaporized via young and old stars. As well, it is actually observed to happen... how exactly does the material dissolve? Well, it is ripped apart by the star and then reassembled according to its properties (current and newly formed) in the central regions of the star forming the new planet.
This means not only do stars cool and become the "planets", they are actually galactic recycling centers. They are the ultimate green machines.
This also means the Earth is made from 100% recycled star guts. Mother Nature doesn't waste.