RE: You didn't think it was necessary ...
"......Say you create a TC volume of 20GB. It is 20GB when created, and remains 20GB as you fill it up. If you create an inner container, the volume is still 20GB......" OK, so the Police run a check on your PC (and believe me, they employ professional techies that have been working with PC forensics for years, they are not amateurs), they see you have a 20GB "file" and spot all the characteristics of a Truecrypt volume which you have not declared. They will calmly ask you if you have any hidden volumes or encrypted material on your PC. You, being a moron, reply "no" - they now have a statement showing you are obstructing a Police investigation, which can be used in court to infer guilt of a more serious crime or just passed to the CPS to get a prosecution rolling.
They then produce the system in question, say they have found the Truecrypt volume and offer you a chance to decrypt it. You, still being a moron, say "no" again. If you are lucky, the Police may point out to you the penalty of not decrypting, or they may just go ahead and ask the CPS to prosecute on the refusal if they had an otherwise weak case. They may point out that if they suspect you are hiding kiddie pr0n (why else would you have an encrypted volume?), they will have to go and interview your employer, family and friends and - unfortunately and of course unintentionally, honest - leave the implication that you are a kiddie-fiddler. Good luck explaining to them afterwards that you were just standing up for a principle.
So, by now if your solicitor hasn't explained to you what a moron you're being (presumably just to protect your encrypted copy of "The Anarchists Handbook" and your mp3z, which the Police couldn't really care about - you aren't really hiding kiddie pr0n, are you?), your family and friends will definately be (remember, in the JFL case his family were desperately trying to convince him to decrypt his files). Let's see how long that "standing on a principle lasts" when your parents are wringing their hands and crying about "their little boy" going away for a stretch.
So, you try and be even smarter and give the Police the key to the outer Truecrypt compartment. Unfortunately for you, all that does is reveal the garbage in the outer container, and the Police point out that you are not in compliance with the request and are again in obstruction. If you do not immediately hand over the inner compartment key you are now looking like you are seriously trying to hide something - you must be a kiddie-fiddler/terrorist/nutter. Have fun in court! And in prison.
Of course, the likelyhood that the Police would even be interested in you in the first place is pretty far fetched. They have more important things to do than waste time on idiots that are "standing up for a principle". Whilst you think your Bit Torrent stash of mp3z makes you a real hax0r, the truth is your just not worth their time.