You can't run backtrack using magicdisc. Magicdisc doesn't allow booting from an ISO, it will just let you view the files inside it. You can use VMware or VirtualBox to load the ISO into a virtual machine instead, which will allow you to do what you want (most likely). The other option is to get the ISO to work off a USB flash drive so that you can boot from it.
You should also look at getting Backtrack 4.