You cannot avoid it - an ISO file is a Disc Image - MEP puts the ISO files in this folder - look in the Disc Images folder and you should see a folder with the name of the project, inside this is the ISO file you created.
Or, an alternative way of "separating" the .iso file from the "Disc Image" folder and files...?
John is quite right, MEP/VPX automatically creates a Disc Image folder under the name "DVD Image (Your project name)" and, unless you designate a separate folder for the .iso file it will be placed there. What I do is to create and name a folder for the .iso file only. (The folder is normally named the same as the project title). At the end of the export process I then have TWO folders, one containing the .iso file (which I have designated as above) and one with the Disc Files ("DVD Image...) Once I am sure that the burn has gone as expected I then delete the "DVD Image..." folder and simply retain the folder containing the .iso file for burning.
(On my system the .iso files show as being zipped files; unzipping with something like WinZip immediately shows all the same files as were present in the "DVD Image.." folder.)
Just to add my 2 cents, the way MEP does this can actually be a life saver, especially if you have enough disc space (which if you edit video you really need copious amounts of disc). This approach creates some redundancy which while it does consume space disc space is really cheap when you consider how much time and effort goes in to creating a project.
The file was correctly made all the time. The problem is Windows 7 sometimes lists the file I am making with "ISO" listed as the "type" and other times as "Disc image File" as the "type". I was sorting the files by type and could never find "ISO" listed.