Is it possible to, for example, deposit an iso file into the iPhone internal harddrive on OSX, and then deposit that file on my brother's Windows laptop? Surely it can be used as an external harddrive?
You could use File Aid/Disk Aid as one option or supposedly iPhone Explorer as another. There are a number of other solutions you can find by searching the forums.
You won't be able to use the iPhone to download the file and save it on your iPhone, however, unless there's a jailbreak option IDK about.