- The disk image was displayed as a device in the Finder for everyone logged into that computer.
- The disk was writable by anyone logged into the computer.
hdiutil attach /Users/username.sparseimage -stdinpass -owners on \
-mountpoint /Users/username -nobrowse
The -owners on parameter means permissions on the disk image will be respected, and only the user with access to that disk image will be able to access its contents. The -nobrowse parameter means the image is not recognised by Mac OS X as a device, and is therefore not mounted in the Finder for everyone logged in. It is still usable for anyone who has the necessary permissions to view its contents.
[robg adds: I haven't tested this one.]

