When considering where to place encrypted container files, many people recommend creating dummy files like "my_hawaii_vacation.avi" or creating deep subdirectories to hide your encrypted files. The AVI idea is nice because you can make a large container but it's easy to see it's fake since it won't play and deep directories are a hassle. Sure, Truecrypt has plausible deniability but any extra security/deniability that does not incur additional inconvenience is always a good thing.

According to the Truecrypt docs