Sorry No, works amazing with normal DVD iso's. However I don't believe you would want the full ISO as I have some that weigh in at 48 GB. Muxing to my container of choice, I have most of my contect at approx 22 - 26 GB. Your 6500 / 7000 supports the following containers.
Video
avi, .mkv, .wmv, .mpg, .iso (only DVD) .vob, .ifo, .mp4, .asf, .tp, .trp, .ts, .m2t, .m2ts
Audio
MP3, WMA, AAC, Ogg, PCM, AC3, M4A, FLAC, WAV, WAV(DTS), WAVPACK
I for the kids keep a 500 GB drive for their content and steam my content thru a central server. I simply got tired of paying for new DVD or ripping backup and bought my first 4100 approx a 1 1/2 years ago. Amazing devices never had one hiccup and my family is hard core. I bought my 6500 once the over heating issues had been taken care of and it is working very nicely. Fantastic devices for HD.
I would suggest you converting your HD content to mkv as it supports .FLAC as there is plans for the 6500 / 7000 to support TRUE-HD Audio.
Now if you like me that has a couple of the tvix boxes and also running a box with PowerDVD Ultra, you might want to stick with the .ts or m2ts containers as PowerDVD Ultra 8 for me has never worked with mvk's. I have read from various groups that 7.3 could work but never been able to pull it off myself.
Now the 6500 can run at gigabyte however I do have the odd hiccup streaming content and sometimes need to convert the data to a slightly smaller size.
I have unforetunately have gone hardcore as SlySoft (I am still waiting and will be first to buy a tool if you produce one
) However here is the first elementary guide to get you started I found. I assure you I have done comparision on my 1080 P projector and it is extremely difficult to differentiate the content.
http://forum.doom9.org/showthread.php?t=136505