Intelligent, even-handed analysis from Steven Frank: .dmg files considered harmful.

As someone who has answered tech support email for a Mac developer, I can confirm that the entire concept of a disk image is mighty confusing to many non-technical users, including many who have been using Macs for years, but don’t install new software very often.

I think the recent trend of including a background picture in the disk image window, which instructs the user to copy the application icon to /Applications (or wherever), goes a long way to removing the confusion. But I agree with Mr. Frank that compressed archives (like StuffIt) are easier for most users to understand.