You can use NAND emulation with SNEEK+DI or PUNEEK to load from a FAT partition but the ISO's need extracting to decrypted file structure instead of ISO format. It's quite complicated to setup and takes far longer than using WBFS manager but this may be a way to have GC ISO's on a USB device in the future.

http://code.google.com/p/sneek/

thanks.
guess i'll stick with wbfs for now, until a drag and drop file system is allowed