Drop DMG is still about, I downloaded it yesterday.
And you can probably still find a copy of Dave Sizemore's FlashDMG.. I had that on my machine as an evaluation version a year or two ago and can't evaluate the latest version (maybe its the same one)
Anyway, since I went through this learning process yesterday, here is what I did:
Open Disk Utility and create a DMG. Leave all the settings as default so you get a read/write DMG
Double click the DMG and you see a new drive called DIsk Image
Rename this to (eg) MyApp
Double click on it, and the drive opens.
Drag an app into the window.
In the view menu, choose 'Show View Options'
Select 'Always open in Icon View'
Drag the icon size up to 128 x 128
Depending on your OS, if you have the option to make these changes ONLY affect this folder,select that.
In my OSX 10.6, there is a button that does the opposite by making this the default. Dont click that.
Next, I wanted a background picture and a link to Applications.
So I cheated:
Open an existing downloaded DMG which has a background and such a shortcut.
Drag the Applications shortcut to your own DMG
Now the background:
With your DMG selected, press SHIFT/CMD/G
In the 'go to folder' that appears, type /Volumes/NameofOtherDMG/.background
Now you should see the hidden folder called .background which is in the other dmg.
Drag the whole folder into your DMG
Go to the View Options window again, and click 'Picture' for the background.
Double click on the preview area, and a file selector appears.
press SHIFT/CMD/G and this time enter
Select the background image
Size the window around the background image.
Close the window.
Now you have a DMG with a background etc.
You can convert this to a compressed image by going back to DiskUtility , selecting the new DMG, and choosing Convert from the Diskutility menu.
DropDMG is still out there, and I managed to use it to add a licence to the DMG.
(I could not understand how to get it to do ANY of the stuff above...)
So if anyone can add the details of how to add a licence file to a DMG by hand, please chip in to this thread.