How big is Windows 7 64-bit? I bought a downloadable version off of Ebay and its a 3gb iso file. This is the 64-bit version only however. I copied it and extracted and its extracts to a little over 6gb. I didn't just get screwed over did I?
The ISO file is a sector-by-sector image of what goes onto the DVD. In order to work as a Windows install disc, the DVD needs to be bootable, and the sectors that contain the boot information are not part of any of the files on the disc.
In theory you could copy all the individual files back onto a DVD and then use some special tools to make it bootable, but it's just a whole lot simpler to burn the ISO image itself to the DVD using the "image" option.