Excellent question! I too am new to a Mac and have no clue what any of this “mounting” stuff means. From everything I read, it has to be run from the “original DMG”. I have a new Macbook. I downloaded the ATV from the website and then it automatically appears on my desktop as a drive. Then I downloaded the OS Boot file from the instructions, which also appeared on my desktop. I then clicked on the ATV Flash from my desktop, it opened a folder, and I opened the ATF Flash DMG file from that folder.
I’ve tried 3 USB drives. Two were unrecognized, and one went through the installation and hung (that was the Cruzer 512MB). What’s strange is that the Kingston DataTraveler 2GB that everyone says works was not even recognized by my ATV.
I’m pretty close to giving up.
[Update] I finally got it working last night. 1GB GTX key from Best Buy worked fine.