Update August 7, 2016
I've trimmed down this tutorial considerably to focus on what is most important. I feel that most of the tutorial was out of date with the docs for Basilisk or SheepShaver and so you're better looking there for guidance on how to get the apps running. Ultimately I feel the biggest help that I can provide here are the ROMs and disk images. But maybe I'm wrong, let me know.
If you've downloaded Basilisk II (Download) or SheepShaver (Download) you may be dreaming about Getting your old Mac Software up and running huh? But where to start? With your modern Mac you start opening up the Emulators and start getting to it only to realize that you need a few things don't you?
The Right ROM for the Right Emulator
If you're interested in running Mac OS System 1.0 to 8.1 you will want to use Basilisk II. Otherwise for Mac OS System 8.1+ you will want to use SheepShaver.
I'll save everyone some time with a bootable Mac OS 7 and 9 disk image.