I created a .dmg file to install a new HD. I am now unable to restore the info on the new drive. Disk Utility does not seem to be able to handle it. I have tried to restore in terminal with no luck. Search didn't really find anything. When I try to do the retore I get a file busy error or a operation cannot continue error.

Thanks
TomH

First try Migration Assistant (/Applications/Utilities/Migration\ Assistant.app)

If that doesn't work, create another partition, install Mac OS X on it, use Carbon Copy Cloner to clone the dmg into your internal HD. (You may erase the other partition if you like.)