that's a cd or dvd image
you can burn it to a disc, or mount it to a virtual drive
i wouldn't extract the files, tho, they wont play right if they're in vcd/svcd/kvcd format unless they're still in the image/on a disc, plus they have to be authored correctly, so once you extract them, they're worthless
make sure you burn it with a good cd recording program, tho
programs like poweriso/winiso, etc. have burning functions, but usually don't record the disc properly
if you don't have nero, i'd use imgburn, which is free, and does a great job at burning images