Enabling downloaded files to be read as fake CD roms

I’m relatively new to filesharing and would dearly like to know how to make downloaded programs run as though the original CD is present. When lanuch icons are double clicked I either get a 'PLACE DISK IN DRIVE ' message or nothing happens at all.
I have Alcohol 120% which I believe does such a task but I’ve no idea how it really works or how to make certain icons or progs run as virtual drives & storage devices (except 1 that has a MDF extension & allowed mw to mount the software as a virtual device in virtual drive G). I think this was more blind luck than any great plan or design by myself!
Any hints, tips or tellings off appreciated.