I had it on my list "to look at" for a long time and finally I found some time to look at this. TrueCrypt gives you the ability to either create an encrypted partition, or to create a file on any partition which contains an encrypted filesystem aka "Container". So far the theory then.
I was a bit sort-of excited. I had some experience with dm-crypt on Linux and EcryptFS on Ubuntu. ... If you check out the documentation on their website, you will see that there is nothing to be excited about. I mean, I expected something fairly complicated to setup and use and so forth, but no - it was just working out of the box. Download the package, execute the install script and run "truecrypt", what does everything for you. The documentation btw. is excellent.
I am using at the moment the Container feature, it works well. What I like is the *only *binary "truecrypt" is doing all the heavy lifting. It serves as a wizard and it is also used when mounting a container. Very well done folks, it cannot be better integrated.
I am using it only on Linux, but it should be easily possible to access your encrypted container/partition from other operating systems as well.
PS: I read somewhere that newer version of TrueCrypt should be supporting YubiKey as well...