NRG files are those files which can be used by CD burning software to create images into CD. In simple words, NRG file is a complete CD in image format. Various burning software such as NERO burning ROM use this. These files can also be used by other software for mounting into virtual drives which shall serve the purpose of reading.
NRG files store data in chunks which is not readable. By converting it to ISO format it can be put in a CD and image file can be created for reading. This file is attached like footer at the end of a data file.
The basic purpose of creating an image or NRG file is to create an exact image of the CD/ DVD so that the files can be accessed without the CD/DVD by using mounting software which shall enable the user to read the file.