Small-angle light scattering is used to assess the dispersion behavior of vapor-grown carbon nanofibers suspended in water. These data provide the first insights into the mechanism by which surface treatment promotes dispersion. Both acid-treated and untreated nanofibers exhibit hierarchical morphology consisting of small-scale aggregates (small bundles) that agglomerate to form fractal clusters that eventually precipitate. Although the morphology of the aggregates and agglomerates is nearly independent of surface treatment, their time evolution is quite different. The time evolution of the small-scale bundles is studied by extracting the size distribution from the angle-dependence of the scattered intensity, using the maximum entropy method in conjunction with a simplified tube form factor. The bundles consist of multiple tubes possibly aggregated side-by-side. Acid oxidation has little effect on this bundle morphology. Rather acid treatment inhibits agglomeration of the bundles. The time evolution of agglomeration is followed by fitting the scattering data to a generalized fractal model. Agglomerates appear immediately after cessation of sonication for untreated fibers but only after hours for treated fibers. Eventually, however, both systems precipitate.