Is it safe to create a tarball of a Time Machine backup? Is it possible for me to create a .tar.gz, .tar.xz, etc file of a .backupdb? Are there any precautions I need to take to ensure that all permissions, hardlinks, etc are preserved? Will tar destroy the de-duplication used in Time Machine's backups?
tar does not preserve all the information in the HFS filesystem.

I would look at having it converted to a image file instead.  I believe Disk Utility can do this for a folder.