An ISO image is a disc image of a game and not required by applications. You are probably getting an ISO confused with a DOL.
1) I don't use The Homebrew Browser because I like to do everything manually. I did try it a long time ago though. If it's still the same all you had to do was download it, extract it, transfer it over to your apps folder on your SD/SDHC or USB, and launch it from the HBC.
2) I don't watch movies on my Wii because it would be downgrading only being capable of 480i but WiiMC is quite popular. Seeing as how your Wii began life as a 4.3 you won't be able to play DVDs but digital files will still be supported.
3) You'll never be be able to play xbox games on the Wii. If you want to see what's available for the Wii console emulation wise see the first part of my emulation guides in my sig.