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I want to boot linux (Mint 14) from an USB drive, but mount essential parts of the filesystem from the hard drive (/home, /usr, /opt). Is there a filesystem type that can be used within a sparse image file on a ntfs partition that can be mounted and used for live r/w operations?

I've seen another question and now know How to create a sparse image. But the questions only talks about on/off use for backups, essentially writing just once. Is this suitable for live use? Will such a sparse image shrink again when files are removed, or will it only grow? If not, are there alternatives? Are there file systems especially suitable for this, or is ext4 just fine?

Thanks for any help.

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A sparse filesystem will only grow, never shrink.

Shrinking it is a manual and time-consuming process including copying the contents twice. Expanding it over its initial maximum size is easy and fast.

An ext4 sparse image will work just fine as the root filesystem of a running linux. But expect some CPU overhead while writing depending on the filesystem the sparee image itself lies on.

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