This is really handy for doing staging of CDROMs and such before burning them. You are creating a filesystem that runs of a flat file
1. Make a 20MB file of zeroes dd if=/dev/zero of=plaintext.img bs=1M count=20
2. Associate the file with a loopback device losetup /dev/loop0 plaintext.img
3. Make a filesystem mkfs -t ext2 /dev/loop0
4. Mount it mount /dev/loop0 (mount point)
-- MattWalsh - 11 Jan 2004