Is this a reasonable back up speed?
 

I recently did a back up that took 11 hours -- much slower than I would have expected given my experience on Tiger.

Here is the info:
iMac 2.16 GHz Intel
260GB backed up
1.2M files
Destination is sparse disk image (encrypted 128bit) on 400MB FW drive

I did a smart update to an empty sparse image.

Does 11 hours seem reasonable? Would it have gone faster with a full back up?

Hard to say, actually... but we're really not significantly slower in our operation under Leopard: the only real "change" from a performance perspective would be that ACLs are being copied in the vast majority of cases.

So -- perhaps this is Spotlight indexing the drive while you're backing up?

No Spotlight as far as I know
 

Would Spotlight index the newly-created disk image?

I did not see any Spotlight activity, but then I wasn't looking for any either.

Does SD take any special action when it starts backing up to a disk image, such as setting the Spotlight status to off or the same as the disk is backing up?

It might, and we try to turn spotlight off and restore its state after... but that doesn't mean it always works as it should.