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Mascott: Oh, except play discs. Meh.
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McGlu: I get around that with MagicDisk. It works great.

You can also use Alcohol. While I can't quite compare it to MagicISO (because I haven't tried the latter in a LONG time, namely: since I settled on using A52% as my imaging/mounting program), I can say that Alcohol 52% is:
* free (although their webpage has the free version so neatly hidden, you most likely won't know it's there, unless you know what to look for)
* can mount up to 6 virtual drives
* makes great images and can bypass pretty much any type of disk-based DRM (you'll need to get another program for ripping movies, though)
* looks really soft and shiny (you won't cut yourself on any sharp edges ;P)
* has a tree structure for easy finding of the right image within the program
* shell integration for easy mounting OUTSIDE the program
* works on Windows 7
* is generally awesome
there is also Daemon tools. the lite version works great for most things, and it's free.
http://www.daemon-tools.cc/eng/home