The isostick shows up as two drives: an optical drive and a flash drive.
It lets you «load» ISOs from the flash drive into the optical drive—sort of like mounting a disc image in *nix, or using DAEMON Tools in Windows—except computers think it's a real, physical optical drive, with no software required.
Because it's all in hardware, you're able to boot from isostick directly.
If you can boot from a USB CDROM, then you can boot from isostick.
Oh, and you can store anything on your isostick—not just ISOs!