Do you use encryption? Beware of Windows System Restore
blog.szynalski.com
blog.szynalski.com
This is precisely what SimpleBackup does with my encrypted directory under Linux. Since the encrypted store is mounted as a loopback via encfs and fuse, SimpleBackup only sees the files the ciphertext that encfs uses to generate the plaintext view. So, to the best of my knowledge, Linux/encfs/SimpleBackup act as I expect them to, backing up only the ciphertext.
Win7 is doing its job; TrueCrypt is only doing part of its job; and I'm guessing that unless you shoulder a lot of the job you think EncFS is doing for you, your plaintext is sprayed all over your hard disk (seriously: image the drive and scan through it in a fast hex editor).
Most files bounce all over the place before they ever see the AES block function. Did you mail it? Did you PGP or S/MIME encrypt the file when you mailed it? Oops: you probably gave up your plaintext to a forensics tech.
I choose to use a secure directory rather than full-disk as part of a security/performance tradeoff, and so I know that there are temp files and caches and swaps all over the place (though GnuPG is setuid so that it can lock pages in memory, thus preventing them from going to swap-- an attacker would have to freeze my RAM to get to my keyring). Most of these, though, should at least be manageable. I can see them and interact with them.
I do agree that in some sense TrueCrypt isn't doing its job, but I argue that's because their expectations have also been violated. Do the API specs make it clear that data written using those APIs may be copied off-partition without user interaction? If not, then the TC team would have to find out the hard way, then scramble to workaround this poor design decision.
If you need crypto-level assurance for your machine, you use full-disk encryption --- or at the bare minimum you turn off system restore points and use secure deletion software. People who harden Win64 professionally know to do this stuff, just like people who harden Linux setups professionally know the rest of the problems with your EncFS system.
I'm a security person, and not a Windows user, and I prefer the Win7 approach over the "whatever makes TrueCrypt easier to write" approach.
Additionally, why did he even open the door in the first place?
If they have a warrant, and if the information is valuable enough, let them expend time, effort, and resources to physically break in while the critical files are scrubbed (i.e. securely deleted with multiple over-writes).
If he's paranoid enough, these days, it will never be permanently stored on hard disk media in the first place. Instead the project files will be on easy-to-destroy and physically tiny flash media.
If the information is valuable enough (especially with corporate backing and 'sources' laws protections in the U.S.) it's worth the risk fighting an obstruction of justice charge.
If someone has a warrant to seize your computer, and you encrypt it's contents, you can be compelled to remove the encryption. If you don't, then you have committed obstruction of justice, and you are going to go to jail anyways.
Strong encryption will protect against the case where someone has your computer, but not you. However, if they have both you and your computer, its not going to protect you.
Also, are you sure that the Windows 7 hidden partition is used for the Volume Shadow Copy Service? My understanding is that it's only used for storing system files, not user documents.
Your user documents (and their backups) should be stored on the system volume (not the hidden partition), and hence should be covered by your encryption software.