Hello kzm007. It means the burning program accepts as input for the burning process an ISO image file, a bit by bit representation of what will be contained on the DVD after it is created/burned. Burning programs accept as input either DVD compliant video files contained in a VIDEO_TS folder or an ISO image file. Some programs will only accept ISO files while others accept both formats.
You can do this in a multitude of ways. This should get you started. http://forums.afterdawn.com/thread_view.cfm/183136
If you see Step 2 of my Video Tutorial, you'll find out how to make a ISO back up of your DVDs. http://forums.afterdawn.com/thread_view.cfm/350532 thanks