Still can't see my custom icon on installer

You seem to be referring to the monochrome icons in the sidebar of the Finder window. I’m talking about the main part of the Finder window. When you choose Go > Computer, you should see your hard drive, perhaps a Time Machine volume, Network, Remote Disc, and any mounted disk images.

Right, as I said above, it’s the mounted disk image, i.e. the virtual disk that you see when you double-click the .dmg file, that gets the custom icon. Please see here for an example. Without the custom icon, it would be pure white instead of having the DropDMG icon badged on it.

The Preferences window is for configuring DropDMG’s settings. Actions are performed in the main window or from the File menu. You may also want to look at the Basics section of the manual, as I think it will make more sense if you see the big picture.

I really think there must be some other factor here. A regular .dmg file will survive transfer via Transmit just fine. It will have exactly the same size, contents, and checksum as the original.