I was having a hard time transferring files from my Mac to my MS-DOS 6.22 VM running in Parallels (I need DOS for radio equipment programming; yes, Motorola still has tons of radios that can only be programmed in DOS).
Parallels has no “Shared Folders” support for DOS, so you need a way to have an image both accessible to DOS and Mac OS. One way to do this is w/ a CD/DVD ISO, but making a disk image w/ Disk Utility and then converting it to an ISO does not satisfy DOS (not an ISO9660 format or something to that effect it complains).
So enter “hdiutil”. I think this is what Disk Utility is a front-end for anyway, but you can do more w/ it from the command line. To create an ISO of a directory called “foo”, an ISO that is even compatible w/ MS-DOS, do this:
hdiutil makehybrid -o ~/image.iso ~/foo -iso -joliet
Change paths to suit your preference.
Tell Parallels about this image by checking “Use image file” under Emulation section of “CD/DVD-ROM Options” and point it to your new image.iso. Now any files you put in ~/foo are accessible in your VM. Copy the files to your VM if you need to modify them, b/c Parallels won’t let you write to the CD. Enjoy!