Regarding the installation the Daemon Tools, just make sure you dont have any memory sticks or anything in your PC as it does not have the intelligence to know you have removed the memory stick.
This caught me out today at work as I took the app and image to work on my memory stick and of course it was plugged in to install it.
When all was up and running my CDRom was D, my stick was E and the Image was F which is correct and worked well.
But... then I removed the memory stick and still Daemon said my Image was in F which now was wrong as Windows says its in E which is what SW requires, so SW did not work.
I then rebooted to see but still Daemon insisted the the Image was in F which was wrong, it was in E according to Windows and SW depends on what Windows says.
No matter what I did it would not work so to enable SW to play I had to plug in my memory stick which sucks.
The only way I could get it to work without the stick, was tell Daemon to make 2 virtual drives which the 2nd one it now made as E so I put the image in there as well so I end up with 2 Virtual drives both with the same image just to get SW to work properly in case I add/remove my memory stick