[stephenr]

Apple allows people to virtualise OS X as a guest OS on top of an OS X host OS, on Mac Hardware.

Both commercial virtualisation platforms of OS X (VMWare Fusion and Parallels Desktop) have very easy "Create OS X VM from Recovery Partition" functionality.

Apple didn't make it a pain in the ass - if you need patched ISOs to install, it sounds like you're trying to do something they specifically don't allow.