I've used ISOs when ripping my CDs just to keep the integrity of the CD, but the only problem is that if I ever needed to edit a file inside, I would wind up unpacking the WHOLE iso, adding/deleting/modifying that one file, that have to repack the WHOLE thing. At first I was kinda doing this because I thought that isos were slightly compressed, but after further examination, it seems that i couldn't have been further from the truth.
Are there any advantages to using an ISO file instead of folder (speed, space, etc) or vise versa?