Ok here goes. If you are doing this on a Mac it really is as simple as selecting the file, hitting enter and manually changing the file extension from .DMG to .ISO, I have done this many times before and it seams to me they are just interchangable, the only thing I would look out for is if the DMG has fancy backgrounds etc. but I don't think that should be a problem. There is a safer but more long winded way to do this through disk utility by mounting the DMG and selecting it in Disk Utility, then click the big new image button at the top and simply look for the ISO option in the drop down menu while you are saving the new image.
Hope this answered your question, Oli.