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If you only change a few kilobytes, dropbox only has to upload a few kilobytes.

I just modified a file in a 64MB truecrypt container and unmounted it. Dropbox took roughly five seconds to sync it.

The only real problem with truecrypt in dropbox is that you can't keep it mounted on multiple devices.

You would also lose easy access to file histories, correct? This is one reason why I'm a fan of SpiderOak -- the index remains encrypted, but file histories are still stored (efficiently).

What do you know, you're right. I am impressed; I was under the impression that because of the encryption, Dropbox couldn't reliably determine what pieces changed.

Truecrypt is designed to work on a block-by-block basis or else it would be horribly slow at everything. So dropbox's job isn't harder than any arbitrary binary file with a few KB changing. Easier, really, since nothing changes size and shifts the data after it.

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