How to back up a computer with PGP whole disk encryption enabled

If you are on Leopard (OS X 10.5 or above) you can do this by having one encrypted disk image containing all the files.

The dmg to create in DiskUtility is a sparsebundle. This creates one bundle that mounts as a disk to OSX but actually is a directory and all the files in it are of a much smaller size. In Finder select the sparsesbundle and then Show Package Contents.

I just created a sparsebundle of capacity 1TB and copyied a 400GB vieo file onto it. The structure of the bindle had many files none of which were above 9MB

The band size can be controlled see hdiutil. But I have not done or worked out how do do this.

If you encrypt something once, you can't weaken it by encrypting it another time. You can strengthen it, but not very much that it makes a big difference. Most attacks are brute force password Crack attacks, on both filevault and the disk image, because there is the highest chance for the decrypter to win. So you harden the step of decryption because you encrypt twice, but you don't harden it much. but btw, best anti brute force tactics are using algorithms like PBKDEF2 instead of simple SHA. but that's something only apple can do. and I expect from them to do something like that.