Here’s what happens when you choose to open a “.dmg” with Disk Utility: dmg in Disk Utility and you’ll actually be taken to the wrong place and be told to do something that – as far as I can tell – is impossible. The Mac OS X app Disk Utility (found in Applications -> Utilities) is also the correct app to use for this purpose, but while it’s a workhorse for administrators, it’s not necessarily the easiest app to figure out, as you’ve now learned. In fact, if you’re working with an OS install CDROM or DVDROM disk image, you must burn it as-is or it won’t be bootable when you go to install the system on a computer.
dmg already and lest someone leave a comment saying “mount the image, drag and drop everything onto a new folder, then burn that folder” as you know, that’ll work to copy data, but in terms of creating an image of the entire setup, it fails. Your instincts are correct that there’s no reason to make an ISO 9660 (“.iso”) image if you have a.