iDMG

If you have ever created a DMG image using Disk Utility, you know how hard it can be. iDMG hopes to make this process easier. This application allows you to easily drag and drop files, applications, or whatever you choose onto iDMG, select a few options and hit the "Create button."

The only downside to the application is the many times you encounter the slow "I am working" message. Other than that, this application offers a bunch of options like encryption, custom icons, and multiple file systems. In addition, iDMG uses the Sparkle update framework and Growl notifications.

This application is available for download as freeware (donations accepted) from the developer's website.