Source: http://www.truecrypt.org/news.php

We are pleased to announce that TrueCrypt 4.2 has been released. Among the new features is the ability to create a TrueCrypt volume under Linux, ability to create a ‘dynamic’ container whose physical size (actual disk space used) grows as new data is added to it, ability to change volume passwords/keyfiles under Linux, ability to create keyfiles under Linux, ability to restore and backup volume headers under Linux, and many more.

This release makes the Linux version of TrueCrypt completely independent on the Windows version. However, both versions will continue to be mutually compatible.
Source: http://www.truecrypt.org/user-guide/?s=version-history

Bug fixes:
  • Writing to a TrueCrypt volume under Linux no longer causes the system to stop responding under certain conditions.
  • Occasional application errors no longer occur when selecting a file (Windows XP SP2 issue).
  • Fixed bug that caused installation of the TrueCrypt driver to fail under certain configurations of 64-bit Windows.
  • TrueCrypt volumes mounted in a remote session under Windows 2000 can now be accessed.
  • TrueCrypt Volume Creation Wizard no longer blocks hot keys of certain applications. (Windows)

Other minor bug fixes (Windows and Linux)

Improvements:
  • It will not be required to reinstall the TrueCrypt kernel module after every minor Linux kernel update.
  • Support for latest Linux kernel (2.6.17)
  • Other minor improvements (Windows and Linux)

Security improvements:
  • The Linux version of TrueCrypt now uses the TrueCrypt Random Number Generator (ported from the Windows version of TrueCrypt) instead of using only the Linux built-in random number generator. (This change was necessary due to a flaw in the Linux built-in random number generator: Data from the mouse and keyboard, which are the most important sources of random data, are not read by the Linux built-in random number generator when the user has only a USB mouse/keyboard.)
    Note: The Linux version of TrueCrypt still uses the Linux built-in random number generator. However, it is now merely one of the data sources used by the TrueCrypt random number generator.
  • Interactive mount mode, which allows the user to avoid passing sensitive parameters via command line. (Linux)
  • TrueCrypt volume is unmapped if mounting it to a directory fails. (Linux)
  • When the ‘Never Save History’ option is enabled, TrueCrypt sets its “current directory” to the user’s home directory (in traveller mode, to the directory from which TrueCrypt was launched) after a container or keyfile is selected via the Windows file selector. Therefore, the Windows file selector will not “remember” the path of the last selected container or keyfile. (Windows)

Miscellaneous:
  • Released under the TrueCrypt Collective License Version 1.0