A few days ago I needed to install software from ISO images. There were two possibilies: burning the ISO images to a CD-ROM or using a virtual CD-ROM drive that can mount ISO images. My preference went out to the latter, so I decided to Google for it. And apparently Microsoft has an unsupported "Virtual CD-ROM Control Panel for Windows XP". The reason why it's unsupported became clear after downloading the product. It contains no setup (only instructions) and the interface is quite basic. But the software did its job very well.
This tool is even not searchable through the "Microsoft Download Center", but it is mentioned on the MSDN Subscribers FAQ.
You have surely other tools to do that like the excellent Iso Buster