It is in fact recommended to use image files. The author said something like that some PC drives can't mimic the timing of the Saturn (causing emulation bugs, for example Nights crashing before the boss battle) which cannot be corrected by the emu so the way fix it is to use image files in daemon.
SSF detects my virtual drives perfectly fine using both ASPI and IOCTL, so you either use the old 0.06 version or use ASPI and have something conflicting with that.
