Like the other guys said, dmg is probably the best way to keep important folders encrypted. However, you should keep in mind the following:
- When you create a dmg file, you must specify its size. Once done, it
will have that size no matter what you delete from it. Also, you
will not be able to add anything in dmg further to that size. There
is a way to resize dmg, like any other partition, you can do it from
Disk Utility. So in terms of size, it's not optimal per se.
- If you want a "flexible" encrypted file, you should use sparse image or sparse bundle image. The first is one large file, the second is a collection of small files (which can be handy). Both types require that you define maximum size, but will physically take as much space as you really put into them. However, as far as I know, if you delete things, they won't shrink - there is a manual way to shrink them from Terminal.
One thing important to me (may or may not be to you): dmg files, even encrypted with 256 AES, can be open in Windows, using appropriate apps. To me, this means I don't depend on Mac, even if I lose it, I can still access backed up dmg files from any machine (any means Windows, over 90% out there are, like it or not). However, sparse and sparse bundle files can't be accessed from Windows, so you're stuck with Macs. To me, this is a dealbreaker for sparse stuff.