TrueCrypt not as deniable as thought

It may not be possible after all to conceal the existence of a sensitive file on a machine. BT security expert Bruce Schneier and a group of researchers have hacked an ultra-paranoid feature in the TrueCrypt open-source disk encryption tool that lets users hide secret files from detection by attackers or others. This “deniability” feature is a sort of extreme file-protection function that first encrypts the file and then hides it within an encrypted area on the disk drive like an invisibility cloak…

More (Dark Reading)

And the paper…http://www.schneier.com/paper-truecrypt-dfs.pdf