...In clear, by burning a selfboot image to a standard blank CD-R, the software containted into this disc image will run onto your Dreamcast, as a legit game disc, without any modchip or other hacking device.
To use this software package, you must have mkisofs from the cdrtools project. This tool will create the ISO image needed by img4dc.
If you want to learn more by the selfboot image format, click here: http://dcemulation.org/?title=Selfboot_formats