ISO are disc image files.
mostly is for games, u download and extract your .rar files to get
your iso files.
Then use Daemon tools(there are others similar software) to "mount"
it.
once mounted, the file will be loaded as your E: (or F: G:.....
depending how many drives you already have).
It simulate have the dics inserted in your drive, a "virtual
drive".
Just install the game, and copy crack to installed folder if
needed.
Some emulator can directly run ISO files without the need to mount
it with daemon tools.