.dmg files are virtual "Disk iMaGe" files. The application called "Disk Copy" in your "Applications" folder can open it. Simply double click the .dmg file, and Disk Copy should automatically open and mount a virtual disk on your desktop, containing the software. Copy the software on the virtual disk image to your "Applications" folder, and you're set. Then "eject" the virtual disk by dragging to the trash. Easy, eh?