Here is a quick tip for any one who is building a test xenserver or a new environment and do not have a fileserver to host your ISO repository. If your XenServer have a local storage formatted in EXT3, you can use this space to create a local ISO SR where you can place your ISO files that your VM can use.

The first step is to check to location of your local storage mount point. On XenServer console, run the mount command:

 

You can then go to that directory (in the screenshot its /var/run/sr-mount/08834e76-c752-eb9a-fda4-d79fd935061a), create an iso directory and upload your ISO files to this location.

The last step is to create a local ISO SR using the xe command:

If the SR is created successfully, you will be able to see the new SR in XenCenter and your VMs will be able to mount the ISOs in this local SR.