From the article, it sounded like he didn't deliberately download child porn, just downloaded a file which, unknown to him, contained child porn. Obviously, you want to take that with a pinch of salt considering the source, but that can happen.
TrueCrypt has a useful feature which you can use in case you are forced to reveal your password. You can create a hidden partition inside the main encrypted partition. Basically, you enter your main password to decrypt the main volume (which can contain all your normal porn), and if you use your super-top-secret password, it opens a smaller encrypted partition (which contains the stuff you really really really don't want anyone to see). And because of the way TrueCrypt deals with volume headers and whatnot, there's no way to prove there's a hidden partition in there. It just looks like random bits, which you would expect.