which proves to be a double-sided sword when comes to universal support, especially under Mac OS 9. DiskCopy allowed for compression, which is still the case for DMG images but the latter also allows for encryption. as opposed to the previous default Mac OS disk image format DiskCopy which totally unsafe to copy over anything else than a HFS (Mac) partition. DMG images are safe to store on any partition type, such as Windows (NTFS) and are safe to distribute over FTP, send by email, etc.
DMG images have been the default file format for distributing software on the internet for Mac OS X users since the year 2000. dmg file is a disk image, meaning it's an exact copy (raw block DATA) of a disk (CD, DVD, USB stick, etc.) or even just a folder wrapped in a disk image.