create a sparse image file for virtualization, e.g. xen

dd if=/dev/zero of=guest.img bs=1M count=0 seek=5000

creates a sparse image, that means it won't take up any space
until stuff is written to it. if you don't want that, just use count
instead of seek.

mke2fs -j guest.img

creates an ext3 fs in that image.

ready for take off!
now: fun!