Their paper proposed two main methods of hiding data: in a series of fixed size files originally consisting of random bits on top of which 'vectors' could be superimposed in such a way as to allow levels of security to decrypt all lower levels but not even know of the existence of any higher levels, or an entire partition is filled with random bits and files hidden in it.
This leads to the problem that very quickly files can overwrite each other (because of the Birthday Paradox); this is compensated for by writing all files in multiple places to lessen the chance of data loss.
While there may seem to be no point to a file system which is guaranteed to either be grossly inefficient storage space-wise or to cause data loss and corruption either from data collisions or loss of the key (in addition to being a complex system, and for having poor read/write performance), performance was not the goal of StegFS.
Poul-Henning Kamp has criticized the threat model for steganographic file systems in his paper on GBDE,[1] observing that in certain coercive situations, especially where the searched-for information is in fact not stored in the steganographic file systems, it is not possible for a subject to "get off the hook" by proving that all keys have been surrendered.
Other methods exist; the method laid out before is the one implemented by StegFS, but it is possible to steganographically hide data within image (e.g. PNGDrive) or audio files- ScramDisk or the Linux loop device can do this.