I tend to leave my 7/8/9 machines as bare as possible so for anything I'm going to use once I have an OS installed, I use Disk Copy 6 images, unless the image/media/disc is complicated enough to merit using a bin/cue. There are some utilities that can mount them (Toast and some other smaller more shareware/freeware oriented tools), so preferences and process here will ultimately come down to how you want to use things. ISO does not work very well on actual Classic Mac OS systems.
To add, Windows ISO utilities like infrarecorder make good ISO images of most Apple CDs, I've had good luck using infrarecorder and imgburn to make and burn images of Classic Mac OS boot media.
