I believe I have found a solution because I found myself with the same problem. I downloaded a RAR file from the Internet containing an MDS and an MDF file, both of which I had never seen before, and I wanted to get the contents of the image on my XBOX. I loooked up the MDS format and got a program called Alcohol 120%, some weird 500-of-a-kind burning program. Since I don't have a DVD burner, I had to extract the files somehow. I opened the MDS file and mounted it with the program's built-in Virtual Device Manager. Then I used a DVD decrypter to decrypt the virtual drive and write it to an ISO file. Then I used xISO (because XBOX ISO's have their own encryption, if you're trying to open any other type of disc, just use WinRAR or something comparable) to extract the contents of the ISO to my hard drive. Finally I was able to copy it to my XBOX.
Hope that helps.