The process seems complex, time-consuming, and potentially dangerous. I believe an encrypted partition that was set to 'invisible' would provide nearly as much security as the hidden TrueCrypt volume described by noworryz.

Also, if my digital data was so important that my life could be threatened by evil villains, the means of encryption would be far less important than my physical security. After all, if threats would make me reveal the main drive password, wouldn't I also reveal the presence of TrueCrypt after the evil villains failed to find the secure data and brought out the thumb screws and hot pokers?

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It is rather complex, unfortunately. That's why I submitted the hint so people who are interested will know how to do it. I spent the better part of a weekend figuring this out. It should be made easier. Until it is, this works.

There are more reasons one might want an encrypted disk (or disk image) than just "evil villains" as you put it. :) There's probably half as many reasons as there are people using computers. Encrypted disk images made with Disk Utility are good but they're not the only means to any particular end and frankly I'm not seeing any performance improvement in using an encrypted DMG file versus a TrueCrypt encrypted volume -- they both drag my 80+ MB/s drives to around 30MB/s.

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