Mount the ISO image using Daemon Tools. Open Favorite conversion software (I like nero digital so I use Nero Recode to convert to mp4). Point to mounted Image. CONVERT!
I have been able to convert ISO's to xvid for my Zen video M using DVDDecrypter and AutoGK. Using Decrypter converts the ISO's to IFO and then AutoGK converts to xvid. AutoGK will also compress them down to a size manageable for the 30GB handheld although you have the option of selecting how much compression you want in AutoGK. I found all the help I needed on anythingbutipod.com. I don't know if this is a method that will help you but you might want to check it out.