The 360 only supports mpeg-4, wmv, and H.264 natively. There are programs to transcode from other formats, but ISO's might not work. If you only ripped the main movie and audio, why didn't you just encode into a movie file? If you want to share the movies with many devices you should consider not keeping them as .iso files on your server.
AFAIK Transcode 360 and Tversity only work with DivX and Xvid, and even then they do the conversion on the fly to .wmv, so it takes a powerful computer and the quality isn't always so great.