No, Grub can boot from an ISO file (no "burning" or partitioning required). You can drag and drop it on a jump drive that has Grub installed and boot to it.
You could even patch Grub to scan the first partition for filenames ending in ISO and present them in the boot menu automatically.
This would be a starting point: http://www.panticz.de/MultiBootUSB I might hack around and see if this can be automated and made to be user friendly.
My understanding is that you can't chainload non-Linux OSes from Grub2. And though I'd rather be loading Linux OSes, most of what I'm doing is installing Windows. So that doesn't really solve my primary use case.
Also, yes, the howtos I've read sound very fiddly, and it would be a lot more attractive if it were automated and user friendly. If this is done in hardware to look like a CDROM drive, that is the most automated and user-friendly solution. Even a fully-functional Grub2 that can chainload Windows isos will still be a little less elegant.
You could even patch Grub to scan the first partition for filenames ending in ISO and present them in the boot menu automatically.
This would be a starting point: http://www.panticz.de/MultiBootUSB I might hack around and see if this can be automated and made to be user friendly.