These files are CD images. This means they hold the contents of the CD in a single files. You can either burn it on CD if you have a CD-writer and a programs like Alcohol 120% or NERO (not free) or you can "mount" the image using a program like Daemon Tools (free). Mounting is nothing more then tricking your computer into thinking that you have another CD-ROM drive in which the CD is inserted of which you have the CD-image. Many programs can mount CD-images but deamon tools is a very good one and it is free.
Get Daemon Tools here.
http://www.abandonia.com/main.php?nav=programs
Once you have Deamon Tools installed you will notice the computer says it has found a new piece of hardware, a CD-ROM drive. let it install the software for it and after that is complete you can immidiately use it. In the case of Deamon Tools right click on the new icon that has appeared on your toolbar in the bottom right corner of your screen (it looks like a red lightning bolt). You now get a small menu from which you can select to mount a new image. Select that and locate the image file in question. Once you have the image file selected press enter. That is it. Open the new file like you would open a normal CD-ROM on your computer and install the game.