prism-break.org says the following:
“While TrueCrypt is open source, it is developed in a closed fashion and may receive less review than a comparably openly developed project. That said, it is still probably the best option for file encryption on Windows and OS X.
“If you’re running GNU/Linux, dm-crypt with LUKS is the recommended encryption option.”
Bruce Schneier has about the same comments. I’ve used TrueCrypt and LUKS and probably the best thing to do is run Linux as opposed to Windows.
I should have added, yes, it should be audited as should all security software.
Since truecrypt is open source, it doesn’t matter who wrote it. What does matter is EVERY LINE of code. We need at least 2 independent geniuses to audit it.