can divx convert iso fils?

Yes, with a ISO extractor/ maker E.G. IsoBuster

no you need to mount them and extract them on a separate program

What do you wish to Convert the ISO to? .. And Why?

You Can burn the ISO to a CD/DVD.

You Can Mount the iso with say.. 'FreeDrive' Or 'Daemon Tools lite'
Then Goto Start menu, Computer, Right click the ISO Drive & Hit Copy..
Then Right click the Desktop & Hit Paste. (Copy It's Contents)

The Main Question is what are you hoping to achieve?

an iso is a disc image

you need to burn it to a DVD or CD,

using iso burning software.

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In XP/Vista

1. Download and install Infra Recorder, a free and open-source image-burning program.

Infra Recorder : http://infrarecorder.org/

2. Insert a blank DVD in the drive and select Do nothing or Cancel if an autorun dialog box pops up.

3. Open Infra Recorder and click the 'Write Image' button in the main screen.
* Alternatively you can select the 'Actions' menu, then 'Burn image'.

4. Select the ISO/image file you want to use, then click 'Open'.

5. In the dialog box, click 'OK'.

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In Windows 7

1. Right-click on an ISO image and choose 'Burn disc image'.

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in a situation where you are not able to burn disc
you can unpack the iso using winrar

Winrar : http://www.rarlab.com/
then use the files that are unpacked..
if you possibly can.