1. is a block device that can be used as a disk but really points to an ordinary file somewhere. If your imagination isn't already running wild, consider creating a floppy disk with file system, files and all, without actually having a floppy disk, and being able to dump this creation to floppy at any time with dd. You can also have a whole other LINUX system inside a 500 MB file on a Windows partition and boot into it--thus obviating having to repartition a Windows machine just to run LINUX. All this can be done with loopback and RAM devices. From Rute-Users-Guide