I wish to protect my data using TrueCrypt container, but I want to make sure that I won't find myself one day unable to access my data even though I enter the correct password. I know it can happen even with unencrypted data (if HDD has failed in some relevant sectors which contain the data), but I wish to know if encrypting the data with TrueCrypt has a higher chance of failure than not encrypting my data at all ?
Whether you encrypt the data or not makes absolutely no difference to the risk of data loss caused by faulty hardware.
Personally I would never use any form of local data encryption as it adds yet another layer of risk to those we already know of.
I save all my data to four external hard drives (all containing same data) and lock them away at the end of each day.