- Create a folder of the stuff you want to put in the image.
- Launch Disk Utility and choose File -> New -> Disk Image From Folder.
- In the Select Folder to Image dialog box that appears, select your folder and click Image.
- In the resulting New Image From Folder dialog box choose DVD/CD Master and None from the Encryption pop-up menu.
- Save the image.
Open Terminal and type:
cd ~/Desktop
hdiutil makehybrid -iso -joliet -o "Test".iso "Test".cdr