What am i doing wrong?

I want to create a disk image - utilities/diskutility/new image... I create it, set the size at the default of 40mb, name it and set the encryption at 128. It asks for password and I create one and it mounts (or at least the only option to click is dismount or eject)

I save it to my desktop. When i double click on it, nothing seems to happen. I want to open it to store some personal confidential text files but can't seem to.

Applecare tells me to do a restart after creating one and i do, but this has no effect. What am i doing wrong? Can't drag a file to it, can't open it - it does not mount in the Finder like my OS X manual says it should. Give me some help please. Thanks.

works fine for me, I did exactly the way you say. "name".dmg gets created, I double click on it and enter password, it mounts white virtual disk "name" and I have no problem copying to and from the virtual disk.

Disk image

are you working with it in the disk utility side bar? or does in mount in Finder? I guess maybe I just copy files to the white disk 'name'? while it's in the disk utility side bar? I'm not very sophisticated when it comes to theis stuff. I keep expecting it to open a window like an application where you can see all the files in it. Maybe since it's a new blank one it won't do this until something is copied to it?

Copy to the White Disk. I had it do mine to the desktop. There is the name.dmg and the name (white) disc icon. I can open it and drag files into it.

use finder, after creating .dmg, there is no need for disk utility anymore.
you do choose "read and wright" format when create right?

you can consider the "white" disk as a kinda "doorway" to encripted .dmg. all "move/remove" file operations are done throught it.

I have a little (2.5 MB) tutorial movie for it, but cannot upload to this forum.

I think I finally got it going....

Thanks for the help - I finally just left things in Disk Utility, mounted the disk image, then clicked on volumes/"disk name" at the bottom of the screen, and this opened the window. i could then drag files or save to the disk image.

This never did mount in Finder - while at WaldenBooks last night, I picked up an OS X manual and thumbed to a section on Disk Images and it showed three ways to do this and they all ended up in Disk Utility - none in Finder.

The OS X manual I was using at home referenced that the Image would mount in the Finder side bar with the little eject button next to it but this never happened. I guess one of these manuals is incorrect - maybe Tiger 10.1 through 10.39 worked one way and 10.46 another?

H**l, i don't - it finally worked and I'm happy. Thanks.