I was looking around earlier today for a tool that would allow me to mount .iso images in Windows XP. I stumbled across a tool Microsoft wrote called the Virtual CD Control Panel. Unfortunately I can't seem to find a page on the Microsoft web site that directly references this tool, but it is a download from a Microsoft site, and it made it through my virus checker, so my best guess is that it's ok.
It's pretty easy to install. Copy the VCdRom.sys file into your system32\drivers folder and then run the executable. From there use the Driver Control button to load and start the driver and then you can add virtual drives that can be used to mount .iso files. Simple!
Just thought I might share my find. I find it extremely easy to mount .iso files in Linux and wanted something on the Microsoft side as well.
I have run across ISOs that won't mount correctly though. I'm not sure what the problem is since I made them all with the same program. Just a caveat I guess. So far it seems that 99% of the time it works fine.