Daily i try different type of software on my computer, some of them are ISO files that can be used by creating bootable Disc and then boot from that DISC. Best example for that is Acronis True image system backup and recovery software, that let you create backup of your system. To use Acronis you need to create bootable DISC of Acronis. So every time testing such sort of software i need to create new disc, so wasting one media disk.
So to know is it possible boot computer from ISO image, you will glad to know that you can boot from an ISO image file. To do so you need EasyBCD software.
Note: You can use this method to boot from Windows 7 or 8 ISO image file, but you are not able to Install windows OS using this trick. Because i have tried to install Windows 7 using this trick but got error "Media driver is Missing".