just to clear the confusion caused here a bit:

 - toast file also mount using disk utiliy when not renamed to .dmg (all images do)
 - dmg does not work in OS9
 - image files do not need to be .bin´ed, as they are binary files.
 - self mounting images should be avoided on the net because they execute code

additional thought:

it can under circumstances be wise to stuff or zip images files, namely when the image is a master, i.e. may not be changed in order to make it work from CD or DVD later. especially when using shrink wrap images it can easily happen that you change its content by accident.