http://en.wikipedia.org/wiki/In_re_Boucher

In that case the government could only compel the defendant to produce his keys because they already knew what was on the drive in question.

It's a federal crime to lie to a border agent or government agent, and the EFF specifically says not to do this - see comment above.

Hidden volumes are fine for other uses and perhaps in other jurisdictions but will land you in hot water in the US/US Border.

The EFF advice is as follows:

Although TrueCrypt hidden volumes may have some practical applications, we think they are unlikely to be useful in the border search context because they are most helpful when lying to someone about whether there is additional hidden data on a disk. Lying to border agents is not advisable, because it can be a serious crime.

Lying to border agents clearly is a serious offence, but as far as I can see that is the "only" major problem with hidden volumes. Given many of the suggestions so far involve lying to border agents along with weird schemes that are less technically secure than hidden volumes it would appear hidden volumes have two things going for them:

1) No worse than other options (assuming you have to carry data with you somehow)

2) Give you a higher possibility that you won't need to lie to border agents (failing to tell them about your additional layer of security will get you in trouble, but is more defensible in court than outright lying)