dmg
Assuming that you're talking about what to do with an OS X 10.1.dmg image, you burn it (non mounted) as is in Toast, etc. Toast--and most others--have a selection for "image file" (instead of 'audio' cd or 'files', etc.).
Otherwise, if its just a .dmg file in general which you are asking about, yup, just mount it like a Disc Copy or .img file.