TrueCrypt just released version 5.1 , adding support for hibernation (see prior post ) to an encrypted system partition (thanks to Joel  for letting me know). They’ve also increased AES encryption speed by 30-90% and a few other nice tweaks and fixes. I went ahead and upgraded last night and started encrypting my drive before I went to bed last night, which only took 2 hours on my 100GB hard drive if their estimate is to be believed! (I believe it; in 10 minutes it had encrypted 10% of the drive.) I was excited to try TrueCrypt again with hibernation support, because listening to Steve Gibson rave about it on Security Now  gave me a bit more insight than I’d taken the time to read about before.
So far this morning, I’ve tried hibernating three or four times, and as promised, TrueCrypt does not block me from hibernating any more. However, my experience resuming from hibernation has been, well…non-existent! After appearing to hibernate normally, when I try to resume I am prompted for my decryption boot password and then Windows boots normally. From scratch. No traces of hibernation present.
My only thought as to why this is happening is perhaps it’s because I decided to use Whole Drive encryption this time, as opposed to System Partition encryption. I didn’t realize when I started the encryption process that the version history was so specific, but it does say that one of the new features is, “Support for hibernation on computers where the system partition is encrypted (previous versions of TrueCrypt prevented the system from hibernating when the system partition was encrypted).” It specifically mentions encryption of the system partition!
I started the decryption process (estimated to complete in 6 hours, much slower than encryption) this morning and when complete, I will attempt re-encrypting just the system partition and see if that fixes the issue. I’ll update this post with information as I discover it!
UPDATE Saturday, March 15th, early morning: Yesterday, I re-encrypted just the system partition with TrueCrypt, but the same problem still occurs. I did discover (thanks to referrer logs) that someone had a similar problem and posted a thread  to the official TrueCrypt Forums , linking to this post. Apparently, while the problem does not appear to be widespread, it does seem to still happen for others. I did not get a chance to try any of the suggested workarounds, but I did post an update to that thread with a few more details of my experience in case it helps resolve the issue. About a day after I posted my details, the developers posted a fix  in the form of 5.1a Beta , which they requested be tested to see if the problem is fixed. I have installed the beta, but it requires a reboot before taking effect. Update coming later.
UPDATE later Saturday: The beta of 5.1a fixed the problem, and hibernation works now. Happy ending! Apparently there is still a problem with a couple of versions of Vista that are fixed but won’t be released in a beta, per Vertex on the forums :
This is a known issue in Beta 1 that affects users running Windows
Vista Ultimate and Enterprise. According to the developers, it was
discovered and fixed shortly after Beta 1 was released. Beta 2 is
currently unlikely to be released so if you use one of those systems,
you will need to wait for TrueCrypt 5.1a final/stable.