The one big advantage is plausible deniability. TrueCrypt can create a second encrypted disk inside the first one.

When you open the "outer" encrypted disk, you'll be asked for a password. You will have 2 passwords. One of them opens the "outer" disk and the other will open the "inner" disk where you keep your important stuff.

You can just put porn or something relatively embarassing on the outer disk so that if a court/CIA waterboarding ever forces you to give out your password, just give them the "outer" disk password.

It's also important to mention that the "inner" disk is indistinguishable from random data and therefore cannot be detected by any known means.

Unfortunately, it looks like plausibly deniable hidden volumes cannot be created on os x. Have not yet been able to test whether it can access ones created elsewhere.

Sorry for the comment spam, but quick check does indicate that hidden volumes can be used on os x, just not created there. But they do outline it as a future feature http://www.truecrypt.org/future.php

@nuno Its important to mention though that its a good idea to make the outer shell a set (or rather, "even") size, such as 30 Gigs, so that it doesnt arouse suspicion. If the Outer shell is 23.416 Gigs, and you have a gig or two of salacious content on there that will set off warning bells in their minds for sure. Be sure to not make the outer shell unreasonably large in relation to the content inside of it, or they will be on that in a heartbeat.

As an aside, does anyone know of any twofish encrypters for Leopard?

You would of course have to create two partitions, one to be formated via TrueCrypt and one as usual via OS X. Of course having a seemingly empty 20 GB partition filled with random data will make it obvious that there is a TrueCrypt-Partition there, albeit encrypted. Hiding Files only works with hidden partitions as mentioned before.

I'm not sure if you can make a TrueCrypt encrypted FAT32 partition. Else you'd have to use NTFS over MacFUSE (for write capability) so you can create a large disk image file

Yeah, I'm getting "No mountable file systems" error when I try to open the DMG file.

Just send me your files, and I'll encrypt em for you ;)

I found that Safari (or their web server) appended ".bz2" to the end of the filename. Rename the downloaded file to just have a ".dmg" extension and it should mount fine.

Platform portability, if that's a requirement for you. TrueCrypt volumes can be used on windows, linux, and os x. Also, as stated by somebody else, plausibly-deniable hidden truecrypt volumes for protection against extortion. OS X cannot create hidden tc volumes, but can use ones created elsewhere. http://www.truecrypt.org/docs/?s=plausible-deniability