Maybe the real question you need answered is "What is an ISO image?"
An iso image (most basic desciption) is an image of a CD/DVD/Blu-Ray.
An ISO Loader would load this ISO image as if it were the original CD/DVD/Blu-Ray (and therefore the image would be playable like the original disk)
You know Wikipedia is fantastic for descriptions of things, Googleis great for researching topics too and the PS3NEW search function is great if you want to find answers to PS3/PS2/PS1/PSP/Wii/DS/Xbox/Xbox360 etc etc questions.
You really should learn how to use the tools provided - it'll make your life a little easier, will open a wealth of knowledge to you and prevent backlash from annoyed regulars.