Agreed — installing modern Windows from physical DVD-R media is painful enough.
I've found iLO 4 virtual media support most useful for booting DOS-hosted firmware updates supplied as El Torito ISO images that aren't natively bootable from USB flash in a world where you can no longer find CD-R blanks at every corner drug store, and where newer machines commonly lack the legacy BIOS support required to boot the image at all.
It's also a fine way to boot minimal BSD or Linux rescue/netinstall images that don't involve live-booting a full desktop environment, or for installing smallish OSes like ESXi in cases where trading increased wallclock time for slightly reduced effort is justifiable.
If you use the web (or older java) console to share the ISO as a virtual drive then it tends to be dog slow. If you SSH into the iLO then you can point the virtual CD drive at a HTTP web server hosting the image which seems to be significantly quicker to read. It uses HTTP range requests for random IO too, so doesn't need to pre-read the entire ISO.
Booting a live cd or installing windows at 1MByte/s speeds (late 1990s CDROMs were faster!) is horribly slow. Maybe iLO5 was a bit better.
usually found it easier (but annoying) to just walk over with a USB drive…