Daemon Tools is the best image mounting software =) I attached the installer to this post.
While installing,
make sure you opt out of the stupid toolbar it offers to install.
Once you have daemon up and running, right click its icon in your system tray:
Pretty simple to use =) It supports pretty much every image format under the sun, including .iso.
If you want more virtual drives, just use the bottom option. You can have up to 4 virtual drives.
Windows sees them and treats them as if they were real drives =)