TrueCrypt for production server - what are my risks?

Be aware that there is no in-place "decrypt" or "unencrypt" utility or function for non-system partitions/drives. Encryption for data partitions/drives is a one-way process.

This means to unencrypt a non-system volume, you need to copy the data to another location (or back it up), reformat the drive, then restore it.

Another risk is the amount of time required to perform an in-place volume encryption. The in-place process can require significant amounts of time, perhaps a full day or longer. For large data volumes, the in-place option may not be feasible. It may be quicker to setup a new encrypted volume, and migrate data over in phases.

Encrypted volumes may not be supported by all applications. For example, using an encrypted volume as a Windows Backup dedicated drive did not work for me. This may be due to the inability of TrueCrypt to work with the Volume Shadow Copy service on non-system volumes. I would not be surprised if other features such as "Restore Previous Versions" did not work.

More information:

http://www.truecrypt.org/docs/removing-encryption
http://www.truecrypt.org/docs/issues-and-limitations