So let us say you are in the directory where you have configured your custom distro and you now want to pack it as a bootable ISO. It appears the safest syntax to use is something like this:
sudo genisoimage -no-emul-boot -boot-load-size 4 -boot-info-table -b isolinux/isolinux.bin -c isolinux/boot.cat -V "my image" -o ../my_image.iso .
As a result, you get the image packed into my_image.iso one level above.
Additionally, here is a nice link to a manual on how to modify your distro step by step:
Playing with it right now. More to follow.