In the context of the Xbox 360, "ISO" and "XEX" refer to how game data is stored and executed on modified consoles:
: The .xex file is the actual executable (like an .exe on Windows) that runs the game on an Xbox. Lara Croft: Tomb Raider - Anniversary ISO & XEX...
: Must typically be burned to a dual-layer DVD to play or converted to a different format for digital use. In the context of the Xbox 360, "ISO"