Freshmeat: Virtual Filesystem: Building A Linux Filesystem From An Ordinary File

“You can take a disk file, format it as an ext2, ext3, or reiser
filesystem, and then mount it, just like a physical drive. It’s
then possible to read and write files to this newly-mounted device.
You can also copy the complete filesystem, since it is just a file,
to another computer. If security is an issue, read on. This article
will show you how to encrypt the filesystem and mount it with ACL
(Access Control Lists), which gives you rights beyond the
traditional read (r), write (w), and execute (x) permissions for
the three user groups “file”, “owner”, and “other”.

“This is an excellent way to investigate different filesystems
without having to reformat a physical drive, which means you avoid
the hassle of moving all your data. This method is quick — very
quick compared to preparing a physical device. You can then read
and write files to the mounted device, but what is truly great
about this technique is that you can explore different filesystems
such as reiserfs, ext3, or ext2 without having to purchase an
additional physical drive. Since the same file can be mounted on
more than one mount point, you can investigate sync rates…”

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