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No, no. A proper setup is like this -

  1. Keep TC container in a non-shared location on local disk
  2. Mount it, keep it mounted
  3. Periodically backup this location to your Dropbox folder

  Now, the trick is to use backup software that is capable of
  (a) shadow copying
  (b) incremental file updates

  Shadow copying works around .tc file being locked.
  Incremental updating keeps things quick.
The only Windows software I know that is capable of this is Bvckup 2 - http://bvckup2.com

(I posted this earlier, but then deleted the post as it read kind of spammy. But this is the way to handle TC container backup, so here it is again. And that's one gem of a backup program too, totally worth a plug).

Then you end up with duplicate local copies of your entire container. Seems very wasteful to me... Especially as TrueCrypt forces you to pre-allocate all the space that you think you'll need.

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