I've read alot of threads that complained that no one could get PowerISO (who created the *.DAA file) to convert/burn/mount *.DAA files...
No one seemed to have found an answer (if there was one and i missed it then i apologise).
But i have a solution, not the most efficiant but it worked for me...
Once you have opened the *.DAA file in PowerISO you are given a tree-like directory showing in the left column. If you right click the main image file (at the top) you are given some options, if you EXTRACT the files from the image... you can then use a decent program such as Nero Express to burn the files into a DECENT image format, or just onto a CD/DVD.
As for the question of compressing the large amount of files... i have no idea to that answer... apart from using DVD-Dual Layer discs which can handle upto 8.5GB. But then you need the Dual Layer DVD Drive to be able to burn them. Hope i've been of help... gimme a little reply here if it worked for you aswell...
