Need help with .ISO files

I have never done this before and I've been teaching myself how to primarily off of internet forums, so I'm sorry if this is confusing. I tried to be as clear as possible, but honestly I'm quite confused myself. I thought I was doing pretty well, but now I'm stuck. :unsure:

I'm on a friend's computer helping him download the Sims 3. I torrented the game, extracted the two .ISO files with WINrar, and mounted the .ISO files using Daemon Tools. I ran the file which was marked as being the first disc of the game. The installation wizard started without a problem and I was able to put in the registration code and choose the settings as usual. However, once it began to actually try to install the game I got a message titled "Setup Needs The Next Disc" which says "Please insert disc 1 that contains the file Caches/Sunset Valley.objectsCache." Below that it says "Path:" and underneath that there is a white box that says "W:" inside. Next to this box there is a Browse button that allows me to search through my files. However, when I do so, neither of the .ISO files appear inside the folder I saved them into, though when I go through My Computer, they are still there. I tried selecting the folder the files are in, but it tells me "Setup could not find a file on the specified path or disk. Please check that the proper disk is inserted or specify a new path."
What is a "path" and which one do I need to specify in order for it to install off of the mounted .ISO file?

Thanks in advance.

Just mount the ISO of the first disc when that prompt appears, and click OK. That should work.

The "path" is the target location. C://windows/nero/wtf/thisfile.iso is a path (a made up path, but a path). Just as an aside, if you ever get a WinRAR error talking about the filename being too long, systems count everything after root drive (W: works nicely) as part of the file name.

Hope this helps. :)

In the "Browse" window, somewhere below the dialog box, there should be a drop down for file type. Make sure it's set to "all" or the ISO's may not appear in the window. Also, if all else fails, try burning the ISO's to physical disks (DVD or CD depending on size of the ISO) I've had to do this for certain programs to install properly for some reason. I think it has something to do with some programs not recognizing virtual drives, maybe.