You can put anything on a disk image (any flavor, including sparse) that you can put on any other disk volume.
Doing so does not in and of itself produce stronger encryption, although it might seem to lead to stronger security in at least the following instances:
- The nested image has stronger encryption, for example a better password.
- You routinely have the outer disk image mounted, but only rarely mount the inner disk image. Someone who steals or otherwise gains access to your computer while the outer image is mounted still won't have access to the inner disk image.
but neither of these advantages comes from the nesting itself. That is, putting the two disk images side-by-side rather than nested would be just as secure.
(It might be argued that an intruder would have to crack both encryptions to get access to the inner data, but these are just serial problems. The attacker doesn't need to even begin attacking the inner ring of protection until they've fully broken through the outer ring. You effectively add only a single bit to the encryption key.)
You may be putting the data integrity at greater risk. If the outer disk image becomes corrupted, perhaps due to an improper dismount, you'd lose access to the inner image as well. Not nesting them means you're not putting all your eggs in one basket.
