I have always had pretty good luck with Microsoft's Virtual CD Control Panel, but I have always had a problem with the fact that they don't support it. In fact it is not that easy to find and won't even come up if you search from Microsoft Downloads. Fortunately, there is another tool called WinRAR that unzips ISO (among other) files and is a free download. (Interestingly enough, I was told about this tool from an MSDN support technician recently.)
Virtual CD Control Panel
Update (11/25/2007) - Works on Windows Vista!