The ability to mount CD images (dmg, img, and iso at least) is built-in. Some programs are "smarter" about this and won't recognize the images as real CDs unless they're mounted through
Toast.
I did something similar with Dungeon Siege for Mac (yes, I own it)—It required the disc to be in, but I created a /blank/ CD image of the same name with a specifically named empty folder inside, mounted with Toast, and the game ran without complaint (home brew no-cd crack, hehe).
BTW, this method should not be used to play pirated games.
