i dont know the exact specifics, but i believe it is how the data is stored. a dvd will rip to a hard drive as an .avi as 700-1,400 mega bytes, hi def movies are 2-4 gigs as an .avi file. the extra space is not for extra content though, it just has to do with media type (Ie disk/ hard drive). a iso is still the exact same size as it would be on disk.
edit: some more info from wiki: "As is typical for disc images, in addition to the data files that are contained in the ISO image, it also contains all the filesystem metadata, including boot code, structures, and attributes." it looks like the disk needs additinal info on how to play the files (chapters and menus) where as non disc formats do not.







