Daphne is a cool cool program, but it's a pain to set up. The daphne homepage has some good FAQs and whatnot, plus if your discs came with ROMS and framefiles you probably just need to drop them onto your c: drive and put the emulator in. I ended up manually editing my framefiles, and that sucked.

As for making DL and Space Ace files there's a utility called DVDtoDaph that does it, but I have no experience there. There was a thread about it some months back though... but I can't find it.
Honestly, if all you want lasergame wise is DL and Space Ace, track down the DVD rom 20th anniversary set. But if you like other lasergames, like Cliffhanger and Cobra Command, it's worth the trouble.