Lifehacker links to a free utility from Microsoft that will mount an ISO image for you. Although other utilities are available to do this, they usually either cost money or infect your computer with malware. You have to create the ISOs yourself (just use a program such as Roxio), and then this utility will mount it. A good use would be, for example, at a LAN party where you only have one copy of the game CD but each multiplayer needs a copy to run the game.
Virtual CD from Microsoft
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I have been using that utility for a while now, it is very good but can sometimes override a network drive, but i wouldn’t reccomend using it at a LAN party, imagine the loading times over a standard network! you would be there forever, and using just one copy of a disc would most likely but illegal, but who cares anyway