[d23]

I always assumed it wouldn't work incrementally, but it seems to sync my 200MB tc file too quickly to be uploading the entire thing when I make a small change. Perhaps someone who actually knows something about encryption can speak to this. Does every byte in an encrypted volume change when a piece of data changes? I guess that would be too inefficient to be the case, no?

[dchest]

Yes, only parts of the underlying file are changed. TrueCrypt uses XTS mode of operation (https://en.wikipedia.org/wiki/Disk_encryption_theory, http://www.truecrypt.org/docs/modes-of-operation).