Apple is very clearly making the “standard” to be downloading a program from the App Store. This has the benefit of making application installation transparent to the normal user. And, believe it or not, normal people have a lot of trouble with the concept of installing a program. Of course that benefit comes with some costs, but this isn’t the place for that debate–there are plenty of other places for that.
Assuming you don’t want to or can’t go the App Store route, both PKG and DMG are common ways to distribute a program. Use a PKG if you need to install files aside from your application bundle (which should not be a common use case). In all other cases use a DMG that prompts the user to copy the application into the Applications folder. But a lot of your users will not understand that they need to do that (unless your target audience is solely knowledgeable computer users). They will run your application from the disk image. Ideally in this case, your program will detect that it is running from a disk image and offer to copy itself into the Applications folder.