Now, I'm more confused than ever. I have the .dmg file which I cannot open. Finally, I realized that in my Finder under Devices, there is a new entry that is simply called Disk Image. That is not the name I chose for my .dmg file, but this Disk Image was not there before, so I'm assuming they are related.
When I click it, it opens right up, with no password request. I am certain I created the disk image with a password requirement. I can save things into it, but they are not secure at all and still listed on file searches such as All Documents.
It doesn't seem secure at all and the only info I have on these is a small section of a PDF from Apple that describes the basics of OSX, and there is no specific info on how to use these images once they have been created.
I'd really like to be able to figure this out, rather than having to upload my journal to Skydrive all the time. My husband and I share our computers and so anytime he uses it, he is under my name. However, I want my journal to be private and I was really hoping this image thing would be the solution. So far, it is pretty disappointing.