Yes, I went through the exact same thing...
I couldn't find anything under MS-Windoze which would get the CD directly.
It helps to have a dual-bootable machine with MS-Windows and
Linux/NetBSD/FreeBSD/whatever
I rebooted my machine under Linux and just do the "dd" command
dd if=/dev/cdrom of=vms.img
(which you probably already know about).
Then I copied the resulting file to a FAT-mounted drive and after that,
I rebooted the machine under MS-Windows and the file was readable under
SIMH on Windows. That file can the be burned onto a regular CD-R,
shipped off to your friend (I'm assuming here that everybody has all
of the correct & legal software licenses), and your friend can use
the CD-R from Windows...they don't need to dual boot.
I don't think there is any way for SIMH on Windows to read the CD
directly, you need the intermediate image file first.
Thomas Dzubin