Creating a filevault 1 sparse bundle?

[3vj3]

So I've been able to install 10.7 and get everything working and now I want to transfer my filevault 1 encrypted home folder to my Lion install since filevault 2 won't work. I've read that I am still able to use it in Lion. Now here is the problem. My hard drive has some bad sectors now, so I cannot transfer the whole image. I already know the specific files. I have all the files backed up except those ones. So how should I go about this?

 

Is there a way to create a filevault 1 home folder in Lion, then transfer all my files to it? Is there a way to do this in Snow Leopard on an external drive, then transfer it over? Or, will I have to install Snow Leopard on another hard drive, create the same account with a filevault home directory, transfer the files, then transfer it over to Lion?

[3vj3]

Here is what I had to do. In order to use filevault 1 in Lion you have to install over a 10.6 install that already has a filevault account enabled. You cannot install lion over a regular account then transfer a filevault 1 sparsebundle over. You can open it but you cannot make that sparsebundle your Home folder. So I reinstalled 10.6 and enabled filevault, installed/upgraded 10.7, and copied over all my data to my new home older.