For some reason nobody published a simple guide like this. Maybe nobody tryied this way. I just tryied and it works with OS X Mountain Lion on a Mid 2012 MacBook Air.
If you have a Mac computer or laptop and want to install OS X, and all that you have is the operating system installation ISO image, you just need an external USB storage (disk or pen drive) of 5GB minimum size. Those regular 120GB or 1TB external disks will work too.
Just remember that all data on this external storage will be erased, even if the Mac OS X installation ISO is just 4.7GB. So make a backup of your files and after installtion you can re-format the external disk and recover the files on it.
To make the OS X installation ISO image file usable and bootable from the external storage, use the Mac OS terminal app or, on Linux, use the command line. This is the magic command:
dd if="OS X Install DVD.iso" of=/dev/disk1 bs=10m
You might want to change the red part of this command to the disk name that you get when inserted the external storage. Remember to not use things like disk1s1 or, on Linux, sdc1. The highlighted blue part on these examples are the partition name, and you don’t want that. You want to use the whole storage, otherwise it will not boot the computer.
After the command finishes execution, boot the Mac computer with the alt/option key pressed. Several devices will appear on screen for you to choose wich one to boot. Select the one with the USB logo and called “EFI Boot“.
Mac OS X installation app will boot and you can start the process. Remember that the default behavior here is to upgrade the installed system. If you want a clean install, select the Disk Utility app on the menu and make sure you erase and create a new partition on the Mac internal storage.
As a side technical note, this is all possible because ISO images — primarily designed for optical disks — can also be written to regular other storages as pen drives. And Apple has also put the right bits on these ISO images to allow it to boot from non-optical disks too.