Daemon tools convinces your computer that it's got another optical drive and it lets you mount various types of disk images, such as .iso. Mounting them in one of the virtual drives has the same effect as burning the CD and using it in a CD drive.
Daemon tools uses rootkit technology to do this. THis does not mean that it is a bad, evil or malicious program.
Virtual PC may have an option to use .iso files instead of physical derives, I know that VMware does.
If you don't have .iso or similar images, but just a bunch of files you can use burnatonce to compile them into an .iso file
What is NetPlus? When I searched for it, it was an ISP or computer manufacturer