after that the cd i burned will take the place of the game itself? correct
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It works essentially like this:
Say I want to make a copy of my Diablo 2 Expansion CD. I can make an image file of the entire CD. That would be the ISO file.
If I were to take that image file and burn it to a CD, that CD would, essentially, be a copy of my Diablo 2 Expansion CD.
Just the same, if I were to send that file to someone else over the internet, they could use it to burn a copy of the Diablo 2 Expansion CD as well.