Quoting André Sänger
require you to create a partition. (The latter is the preferred method, imho, since by using 4.5 gig files, I can easily make fully encrypted backups on dvd)
How safe is this backup for read errors on the dvd? I mean does a single read error make the whole loop file unreadable?
You mean write errors? Depending on where the error occured, yeah, it would probably screw it up. Of course, the same can be said of compressed backups like tar.gz's. There's always a balance between data assurance and data security. Linus Torvalds invented the best method of data assurance: Upload to the internet. Of course, that method is quite the opposite of keeping your files securely private. Encrypted loop files backed up to DVD is the best method I've been able to come up with to have secure backups without too much hassle.