I take this with a grain of salt. Even if the Truecrypt developers gave it up, and even if there is some security flaw in the existing Truecrypt, I probably won't write it off immediately.

For one, who am I trying to protect my encrypted stuff from? It's not the NSA. And even if I were using Truecrypt and expecting it to stand up against the NSA, that would be quite naive of me to believe that. The average hacker? Chances are they wouldn't be able to exploit any security flaws in Truecrypt, unless a wide-open hole gets so widespread that there is a pre-packaged script for all the "script kiddie" hackers to use. That leaves the common laptop thief. And they probably couldn't decrypt some as simple as ROT-13.

So, while it is not good if Truecrypt development is halted, and it is not good if there exists some unpatched flaw in it, I'm not going to be running around like Chicken Little doing "The Sky Is Falling!" bit. Chances are, if you use some OS built-in Microsoft encryption, that WILL have an NSA backdoor in it and be no more secure than Truecrypt as it currently stands.

Everyone should probably step back and take a deep breath until their panic subsides. There may be better alternatives to Truecrypt going forward, but don't get all bent out of shape immediately over this new announcement and do something rash, like switch to some other encryption without thoroughly researching its pros and cons. Chances are you'd be no better, and might be worse, than just sitting on your Truecrypt as it is until things shake out.