[expert] Doing a virtual partition in VFAT: is it correct ?

[Linux Group DIFI]

Hello,

 I would a tmp space (in ext2 partition) to do my CD.
 Yes, sure I can do my cd using mkisofs -x or -m options, and using a little
tmp space.
 But I woult do this:

 1.   cd /dos                   [VFAT with about 1Gb free)
 2.   echo ciao > tmp.img               
 3.   losetup /dev/loop0 /dos/tmp.img
 4.   mkfs -t ext2 /dev/loop0 700
 5.   e2fsck /dev/loop0
 6.   mount -t ext2 /dev/loop0 /mnt/iso

 It is correct or I have to use fdisk befor 4. to create a partition ?

 Could this erase my data on HD ?

 Thaks in advance.
 R.A.Foglietta