I've got an external HDD with an encrypted sparse disk image on it, and I'm wondering if I need to do anything special to it before upgrading my MBP to Lion. I can't imagine I would, but if anyone has any info on that I'd appreciate it.
As far as I know, you should still be able to mount existing sparse image files on Lion. I was able to with the dev preview (no, I haven't installed the final Lion yet).
If it was some third party encryption, then I'd suggest waiting until they update for Lion, but Apple sown encrypted sparse image files should work fine.