Custom Templates allow you to install pre-configured or in other ways modified OS templates. Here's a short list of changes/features you should be aware of before proceeding with a custom template:
Before installing any custom OS templates it is highly recommended to make a full backup of your current environment if you have one. In case something goes wrong, you'll be able to revert back the changes and try again without losing data. If a backup is not performed and an installation fails, only option left will be to install a clean OS from our default templates which usually means data will not be saved. This also applies to OS re-install as well.
If you install an OS from a custom template you won't be able to see or change your root password from the Client Area anymore. We recommend noting down the password you used during the installation somewhere safe. In case you lose or can't remember the password, the only option left is to re-install the OS from a template.
Image size shouldn't be more than 10GB. However, you can fill the 10GB space with as many templates as you might need if they all are under 10GB in size when summed.
Bootable and non-bootable
Usually, a bootable ISO type means that the template is planned to be installed and has all installation functions implemented from the boot. Non-bootable discs are meant to be mounted first.
Choose the OS Type that is as close to your ISO as possible. If your OS is not listed, there is a big chance that the base of that OS is in the list - for example, Linux Mint 18 is using Ubuntu 14.04 LTS as a base and therefore your OS Type should be Ubuntu 14.04. You usually can find the base for an OS in its description, faq or documentation.