Installing software

Hi, as a newby to this forum and a newby to Mac I am a little (very) confused by how to install software. I have a Macbook and have read that all you do is drag the file (dmg?) into the applications folder. I want to install the MacSpeech Dictate programme which comes with two files MacSpeech Dictate.dmg and MacSpeech English Data.dmg. What do I do with them? I am converting from an XP machine so please bear with me. I have had enough of Microsoft.

Thanks

Brian

I started typing up a long winded answer and came to the realization that someone already did it better than I could.

http://www.silvermac.com/2006/how-to-install-application/

Just double-click on the DMG files, and usually you'll find installation instructions there; the DMGs are usually virtual disks represented as files.