If your first thought, when reading the title of this post, was “What in the hell is a disk image?”, you probably aren’t alone. But before you decide that you don’t care enough to read on, let me quickly tell you what the big deal is so that your decision to stop reading will be an informed one!
A disk image is a virtual copy of a real disk (so a virtual CD).
That’s it. This is cool because you can make backup copies of your CDs/DVDs (though some have protections that may make this difficult), video games, operating systems, etc etc.
On top of that, you can use virtual CD-drives to play your virtual disks! This has a few advantages:  your computer communicates faster with your virtual disks than your real ones, and  you won’t have to worry about carrying CDs around ever. Of course, CDs are going the way of the Dodo, so this post may already be useless.
In any event, my middle brother and I once started a custom-PC company called Mindforge Technologies. I made a screencast tutorial for the company that shows how to use disk images, which is the Youtube video above. Enjoy!