Can I directly play a video (.avi, .mpg, etc.) stored on a TrueCrypt volume?
Yes, TrueCrypt-encrypted volumes are like normal disks. You provide the correct password (and/or keyfile) and mount (open) the TrueCrypt volume. When you double click the icon of the video file, the operating system launches the application associated with the file type – typically a media player. The media player then begins loading a small initial portion of the video file from the TrueCrypt-encrypted volume to RAM (memory) in order to play it. While the portion is being loaded, TrueCrypt is automatically decrypting it (in RAM). The decrypted portion of the video (stored in RAM) is then played by the media player. While this portion is being played, the media player begins loading next small portion of the video file from the TrueCrypt-encrypted volume to RAM (memory) and the process repeats. The same goes for video recording: Before a chunk of a video file is written to a TrueCrypt volume, TrueCrypt encrypts it in RAM and then writes it to the disk. This process is called on-the-fly
