An iso file is simply a disc image file. It's usable to basically take the file, slap it down as-is onto a CD or something, then use that CD to access the files stored there. It's not really a file format for opening with a basic word-processing application or anything like that. All the files that would be stored on the CD are encoded into the .iso file along with any other disc stuff about the filesystem and so on. So literally an entire CD is encoded into a single file so that you can then take that file and copy it exactly onto another CD.

There just happen to be programs which will let you access the contents of the file similarly to how they'd be accessed if you loaded a CD with that data.

When you properly burn the iso image to a CD, you shouldn't end up with an iso file on CD, you should end up with a CD full of files, folders, whatever else.