Well, you don't really need to make .dmg files to backup your software, but you can do so with Applications->Utilities->Disk Utility.
Click on the "New Image" icon and make an image of whatever size (and possibly encryption) you desire.
It's perhaps better to right-click on your desktop, select "New Burn Folder", create one and name it as you wish, then drag items onto it (they aren't really copied, but a note is made of what you want in the folder). When done, right-click on the folder and select "Burn".
Open Disk Utility (in Applications > Utility folder). Select Help from the Help Menu. Full instructions are there. For a simple backup insert your CD, drag what you want to it, when you eject it will burn the disk.
I think that you could use Roxio Toast to make copies of your CDs, but you may need to check up on this. I've had some problems with using Automator to create DMG files. Thanks for the Disk Utility trick!