ImgBurn is a popular free application for write data to CD/DVDs and creating ISO image files. Concerning the ISO specifically, yes it can make bootable discs. This is very useful for creating emergency recovery discs.
In the video below, the place mentioned where to get boot diskette images is AllBootDisks. Compared to other web sites that offer the same downloads, this one has both the EXE and the IMG versions from MS-DOS all the way up to Windows XP.
The best part about all this is that everything is free. The only thing you have to pay for are some blank discs to burn and nothing else. See video above for details on how to make it all happen.