[eru]

> I'm thinking that the repository could be moved out of the working directory and placed in its own file that's not invisible.

Symlinks are your friends.

> then repos would be portable and you could ftp them.

tar might come in handy.

> The backup functionality could be separated from the history-tracking functionality, so you could make backups freely without adding noise to the commit history. A backup would basically be a tarball that you could append to a repo file, taking advantage of previous entries for compression.

You can already do this. You can have commits without ancestors or descendants in your repository, and they will still benefit from delta compression.

[mtdewcmu]

The idea is to make it less monolithic. I'm digging more into the inner workings of git now. The functionality might already be in there, just not obvious.