There are several options for working with disk images under Windows, using File Disk, MTools, Win Image, or Virtual Floppy Disk.

File Disk

This little tool by Bo Brantén allows the mounting of a disk image to a drive letter:

filedisk /mount 0 "C:\Full\Path\To\Image\disk.img" D:
filedisk /umount D:

Of course, you have to adapt the path and drive letters to your system. Note that the path to the image file must be complete, i.e. including drive letter, or it will complain about not finding file "D:"...

MTools

MTools gives you command line access to a disk image, it does not mount an image like the other programs, but you get MTools 'dir', 'format' etc that access the image. This is obviously not as integrated as mounting the image so the Host OS itself can see the filesystem, but its the next best thing.

Win Image

Win Image gives you an Explorer-like window on a disk image. You can create images, browse directories, and drag and drop files. Win Image supports images for FAT floppies and hard disks, and CD-ROMs (ISOs). It will also extract an image from a disk, or write an image to a disk. One drawback is that it's shareware, unlike File Disk and MTools, so if you want to use all of its features after the evaulation period expires, you will need to pay.

BFI

BFI-Build Floppy image creates FAT12-formatted floppy images from the command line, inserting the user's bootsector and files. It is created using the Win Image SDK. BFI is available here

Virtual Floppy Disk

Virtual Floppy Disk mounts your image similar to using a Unix loop device as a normal floppy disk. You can then access it by all normal means including disk editors (of course, not fdisk). This tool is used similarly to filedisk. After installing and starting the device driver with:

vfd.exe install /AUTO
vfd.exe start

You can mount and unmount the floppy using:

vfd.exe mount floppy_image.img /L:b
vfd.exe unmount

where /L:b instructs the driver to use drive B: for the virtual floppy.

Pre-Made

There is a pre-made disk image with readily installed GRUB available from the Clicker download section. or you can use this grub 0.94 boot image to install your own image imagefortress