An image retains its bootable properties, Richard... it just can't be booted from until restored to a real drive. And, yes -- as we describe in our User's Guide, you can boot from the OSX DVD and use that to restore. Once restored to a real drive, it'll boot (as long as it's a real "Backup - all files" maintained with Smart Update or Erase, then copy).
So, if you want to make a copy bootable, yes, you'd choose the volume/partition as the destination. And if you want to restore it, you'd either use Disk Utility from the OSX DVD (which can copy volume-to-volume) or you'd boot from it and use SD! to copy back. I go into this in detail in the User's Guide.
Hope that helps!
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--Dave Nanian
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