You have to place mkisofs.exe in your working directory, otherwise, DOS won't find it. It you're trying to make your iso in (say) "C:\SELFBOOT", you must copy mkisofs.exe in "C:\SELFBOOT".
After that, when you type your dos command, you must be in the right directory. To change your current directory, type "CD newdir" (for example, if you're in "C`\>", you must type "CD SELFBOOT").
Good old MSDOS basics.
