Jesus Vigo goes over the steps to create a bootable USB to install OS X 10.7-10.8 and OS X 10.5-10.6, as well as how to put multiple versions on the same USB. A.dmg file is kind of like an USB stick in a file and can be handled more or less the same way. To install from a.dmg file you usually do the following: double click the.dmg to make its content available (name will show up in the Finder sidebar), usually a window opens showing the content as well.
0 - THANK YOU to all who came before on this hint/thread/comment... i am just standing on top of the giants before and adding my little comments for others...
Install Dmg Mac
1 - i could not make a windows-keyboard work... in particular, my imac (g5) would 'ask' about it when powering up by having me press the key 'just inside of shift key' on each side... thus, i was never able to make the keyboard-combo work correctly... if you cannot get into open-firmware, then try getting a normal MAC-keyboard...
2 - i was having all sorts of problems trying to get the correct device to use for the 'dir' command... i could see the tree of information, but could never make a working 'devalias' for myself... two clues:
What Is A Dmg File
3 - i was finally able to get things working better by doing/trying the following (details removed for hopeful-clarity):
How To Open Dmg
4 - once i got my magic incantation correct, it took prolly an hour to get thru the first-boot - but eventually i got the great happy-mac sound from the other room... hopefully you will be able to too... :)