If you're in a country where the government would torture you indefinitely just for suspecting that you have a hidden TrueCrypt volume, you're probably screwed anyway if you ever appear on their radar. At that point you probably did something else besides using encryption that would be sufficiently susicious to get you tortured.
Plausible deniability is simply not a useful defense against someone that would decide to torture you for a mere suspicion.
It is not just about torture. You might be penalized by a judge for failing to disclose your "other password" regardless of whether or not it actually exists -- you might even be asked to prove that there is no other password. A customs officer might refuse to allow you to bring your laptop across the border until you enter your "other password," also regardless of whether or not there actually is another password.
It is also worth pointing out that the number of passwords you deny having is completely irrelevant. You could claim to have forgotten the one password you use for non-deniable encryption and the effect would be the same (and your story is equally plausible). It is much easier to claim to have forgotten one password than to try to maintain an innocent partition, so you might as well just do that.
> A customs officer might refuse to allow you to bring your laptop across the border until you enter your "other password," also regardless of whether or not there actually is another password.
I never thought I'd feel the need to offer this as serious advice, rather than just a novelty toy, but SpyCoin is a way to get data across borders.
A large chunk of unexplained high entropy data is a bit of a giveaway.
You can't really hide the fact that you're using encryption, because it doesn't really look like anything else apart from random data & people don't usually go around piping /dev/random into large files for no good reason. Compressed data is high entropy, but can be decompressed to something lower entropy, so you can easily eliminate png filess, zipped files etc.
I thought full disk encryption left the drive looking entirely unformated. Although you'd probably have truecrypt installed on the computer. You would also want to not save volume mounting history.
But if you had truecrypt installed and 1 drive that wasn't formatted... Yea
Yup. Plausible deniability only works if a strategy is unlikely to be known by an adversary. In this case, it is widely known that TrueCrypt has hidden volume capabilities, so there's not much of a veil of ignorance to hide behind.
Btw: there's no explicit restriction on N-level deep of hidden volumes, but TC won't automatically make the outer ones read-only.
Plausible deniability is simply not a useful defense against someone that would decide to torture you for a mere suspicion.