Yes, you can put a TrueCrypt volume in your Dropbox, and Dropbox is even smart enough to upload only those bits that you change. But it means you lose the benefits of syncing individual files between multiple devices. Good luck trying to mount the same TrueCrypt volume in two devices at the same time. Instant conflict!

The same problem happens with every encryption solution that uses a large container. The only viable solution is filesystem-based encryption schemes that work with individual files, like EncFS or eCryptFS.

By the way, SpiderOak has client-side encryption and two-factor authentication. But it's slow as molasses.