I read all the forums on using CloneCD at 1X to make OS disks. I downloaded and installed CloneCD and the CloneCD images to go from V17 to V25 in my 2001 X5. Goedhart gave excellent instructions for doing this and a link to the
http://www.bimmernav.com/software.htm site showing how to use CloneCD. BUT the new version of CloneCD does not have the same screens or menus.
Closer inspection of the screen shots on this site showed the "Copy from image file to CD Writer" screen. On that screen was the answer. After "Write Mode", it shows using "RAW DAO" for the file type.
In Alcohol or probably any other program, the default is "DAO / SAO" which per the forums, won't work.
So, I put in a Sony disk into my Sony recorder on my pc, and with Alcohol 120%, selected the file, selected "RAW DAO", and 40X, then burned the disk. Did the same for the key disk.
Went out to the car, put in the disk, and it updated the OS to v25 first time, put in the key disk as asked for, said ok and was done!
So the file format is key as Goedhart pointed out. Burning the disks using "RAW DAO" format probably will work with any burning program, but you will have to try it to be sure.