What is the difference between a "sparse disk image" and a "sparse bundle disk image"?
From the DropDMG manual:


  Sparse
  bundle disk images appear as a single
  file but are actually stored as a
  folder with many files inside. This
  makes it more efficient to back them
  up using Time Machine or other backup
  utilities, as only the changed parts
  need to be copied. Additionally,
  sparse bundle disk images work well
  with the Compact Image… command.
  Compatible with Mac OS X 10.5 and
  later.
  
  Sparse
  disk images are stored as a single
  file. This can make backups
  inefficient for large disk images,
  because the entire file must be copied
  each time. The Compact Image… command
  generally does not reclaim as much
  disk space as with sparse bundle disk
  images. Compatible with Mac OS X 10.3
  and later.