I'm currently installing virtual box, and one of the steps requires that I add a disk image (in my case, an ubuntu ISO file) to a virtual CD/DVD drive listed under the virtual machines Storage.
From what I understand the ISO basically contains all the contents of ubuntu. And once I've allocated enough disk space for my virtual machine, I need to install ubuntu by reading from this ISO file into my virtual hard drive.
So- is that the reason why I need to add the ISO image to my dvd/cd? Because it acts as an ACTUAL cd/dvd? My understanding is limited - I just want more clarification about this process!
.iso files are images of the entire content of a CD. They are meant to be burnt on a actual CD. But there are now several programs allowing to read the content of an .iso file without actually writing the data to a CD.
You're right in everything you said. Virtual Box simulates (almost) everything of a real computer: disks, drives, memory, USB ports... The drive is initially empty, i.e. has no CD/DVD inside. Then you choose which CD should be simulated inside the drive. It can be either the actual CD on your physical machine, or a CD image, i.e. a .iso file. When some program inside the virtual machine wants to access the data written on what it thinks is the CD, Virtual Box reads the .iso file and answer the program, as if the data came from a CD.