Some people like to keep backups of DVDs or games on their hard disks. In order to keep the number of files to a manageable size they often use a program like CloneCD, Nero or Alcohol 120 to make an ISO Image of the disk. That is a single file that can be re-burnt without having to re-read the original disk.
Another neat thing about this is that several programs can also load these images directly and make them appear as real CD or DVD drives on your computer.
For instance, if you're fed up with having to put a game cd in every time you want to play a particular game, you can use Daemon Tools, Alcohol 120 or Virtual Clone Drive to load the image.
When you go into My Computer you will find the loaded image appear as a new drive, which you can explore or autorun in exactly the same way as a real DVD or CD.
Also, these programs often have the ability to trick the game into believing that the copy protection method used for that game is present on the virtual drive - often you will find that if you copy a game it won't work because of the copy protection software used by game developers.
Slysoft used to give this away for free with CloneDVD2 and AnyDVD, so it's well worth downloading. Another free program, similar to this is called Daemon Tools.
Word of warning - some PCs don't like Virtual CD Clone - and will blue screen every time it loads, so don't let it load automatically with Windows until you know where you stand. This is the reason I use Daemon Tools instead.