I had just created a sparse image and was going to try this. So, if for some reason I need to reinstall this backup image, this is what I would do:
1) boot off an OS X cd
2) Load disk utility
3) mount sparse image off firewire drive via disk utility (can't figure out how to do this from a boot CD)
4) perform restore (can't do this unless I can get the sparse image mounted, because it won't let me select it from navigating to it on the image on the firewire drive).
Maybe this process is documented better somewhere else, but I couldn't find it.
Thanks again for the quick response! I guess apple doesn't want anyone to clone their drives before the big upgrade
-B