In Windows, native support for ISO files only came with Windows 8, which means older versions like Windows 7 require tools to be able to do this. The problem with ISO files is that you can't view the contents or even open the file without special utilities or native support. The image file itself is uncompressed, and the structure it uses to store the data will be based on the file system that was on the disk that contained the original data. The files inside can be anything: media files like music and videos, installation files and so on.
Essentially, an ISO file is a copy of all the content from a DVD/CD/BD in archived format. ISO file can be extremely useful when you need to install an operating system or even a software utility.