I think you have copied the .iso to an ordinary CD, rather than making the CD one large bootable iso volume. What CD burning program did you use and does it have a 'burn as iso/burn as bootable' (or something similar) option?
You may not have to 'uncompress' (well extract the files from the iso, really) the files first, depending on your burner program. I think recent versions of k3b can do the trick of doing this transparently and probably other programs too, but it depends on the program that you use.
Btw if it helps, my CD can hold 700mb of data. The Ubuntu download was 699.1mb. But when I look at the .iso file in t
I think this is the 'a megabyte is 1000 kilobytes'/'a megabyte is 1023 kilobytes' issue, and not really relevant.