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An ISO image is an uncompressed file format that is meant to contain the binary image of an optical medium (like a CD or DVD) and is usually stored in an larger than the original file. So, would be more efficient to use ISO images or other RAR-like formats to store and compress files? It depends on what. An ISO image is an uncompressed file format that is meant to contain the binary image of an optical medium (like a CD or DVD) and is usually stored in an larger than the original file. So, would be more efficient to use ISO images or other RAR-like formats to store and compress files? It depends on what.