Almost all kinds of disk images (ISO) files can be mounted and burned in OS9 with the program called Roxio Toast Titanium 5 which you can find here: (5.23 key: YWXX-CGP-USW-DV3-LCUO *or* SP-HG15N-HP693-S72OR) NOTE: If the error message you get afterwards is something like: 'Could not find the application program that created the document' then it means that the StuffIt version you have on your Mac OS 9 system does not contain a recent enough ShrinkWrap engine to mount the ISO file inside the SIT file. My suggestion is: Re-download the original ZIP file, place it in the 'shared' folder, launch SheepShaver, copy it on the desktop, extract it and then it will work.
Resource forks will automatically be lost/destroyed by Windows and render the whole file unusable. You do not ever want to extract pre-OSX Mac files outside of the Mac OS environment. Try and copy the SIT file to the Mac OS 9 desktop within the SheepShaver and THEN extract it using StuffIt Expander. From experience, I can tell you it will probably not work to try and execute or extract files directly from the 'shared' folder.