Sparse Disk Image track record?

[dnanian]

Yes: sparse images are used for FileVault folders in Panther, and I know that they -- along with lots of other things -- took fixes for Panther (and later releases). But I believe sparse images work quite well as long as you don't get any internal corruption due to crashes and the like...

In any case, I absolutely recommend that people update to Panther. There are a lot of improvements in it, as there will be in Tiger. And we don't guarantee that any version past v2.0 will be Jaguar compatible: we just can't maintain backward compatibility forever -- it constrains new features too much, and makes our testing matrix far, far too difficult to execute.