The idea behind the 'Image Recorder' or 'fake recorder' as you refer to it is to allow the user to create an Image file. Be it an .NRG or .ISO image file.
And as surprising as it may sound, a number of users use our software without having a recorder connected to their system. This way they can create an Image file and have a colleague burn it to disc using their recorder.
Others have a CD recorder but not a DVD Recorder, and wish to create a DVD Image file so that they can have a colleague burn it to DVD for them.
And others wish to test the disc they wish to burn before burning, and creating an Image file and then using our Nero ImageDrive utility to mount it and run it like a CD or DVD is helpful to them.
As for the label issue, this is still being debated as to the best process to use. But due to a number of developments going on, it's on a bag burner for now.