You do not need to burn the .dmg file in order to install. Only do that if you want to back it up or install on a computer other than the one on which you downloaded it.

Remeber: This disc was 3.5 GB but DMG's are compressed, so it's 2.91GB.
I ripped this (my own DVD) with disk utility, so it's safe, for those of you who might be concerned. Also it does not need a serial number. Apple doesn't require those for any of it's core products. They assume you'll buy them and they don't need to lock you down. ;-) But seriously though, if you like this you should consider buying it (not to get too preachy or anything)