Truecrypt HOWTO:
http://blog.gnu-designs.com/truecrypt-on-linux-with-xfs-and-ext2ext3-volumes
Format as ext3 FS:
Here’s how I created a Ext3-filesystem in a external Truecrypt device.
truecrypt -l
gives you information about your mounted Truecrypt drive. Typical output:
/dev/sde2 /dev/loop0 /media/truecrypt1
You need to unmount the volume using
sudo umount /media/truecrypt1
Then you can format the volume (the encrypted volume that is):
sudo mke2fs -j -m0 /dev/loop0
This will format your encrypted volume into Ext3.
When finished, just Dismount it using the Truecrypt GUI, and then mount the whole thing again. Now, you’ll have an encrypted Ext3-formated volume!