I've seen various software that does this with multiple installer/liveCD ISOs for Linux distributions but none that could actually boot all arbitrary ISOs (Windows installers, DOS rescue disks) which need to be on a logical device partition.
I used to have a 2.5 enclosure that supports this in hardware (Zalman ZM-VE300) but selection of ISO is done on-device before booting. I don't see any reason you couldn't build a hardware/software combo where selection on-screen made the USB hardware mount the selected ISO as a new logical device and then booted it.
It is possible with EFI based boot loaders from what I've seen. I was looking for something similar and ended up discovering rEFIt and rEFInd. Although it isn't technically an OS it can autodetect entries from the MBR. http://www.rodsbooks.com/refind/
1. Flash boot os on the boot sector, place any iso/img file on the stick.
2. Boot from the stick
3. select the iso you want to boot
Don't know it this is possible though... (I know that there is a emulation mode for virtual cd drives in the bios but thats about it...)