To mount an ISO Image means creating a virtual CD-Rom Drive inside the operating system itself, and then cheating the system to believe you have just inserted a CD into your Optical Drive. When you are able to perform such a beauty of a cheat to your Windows 7 unfriendly environment to older software, you will have access to the content of your cherished ISO files.
Daemon Tools used to work well on Windows Vista, but this Virtual Optical Drive software, which is free, seems to not have completely come to terms with the new Windows 7 ... yet.
Magic Disc is the perfect solution: A freeware software that delivers with no problems at all in Windows 7.