Truecrypt uses SHA-512 for its PRNG, you cannot possibly key AES-256 with a full SHA-512 output because AES-256 takes only 256 bit keys. The bit strength of SHA-X is X, in certain circumstances the security strength could be less due to various attacks, but if collisons are found with less than 2^X probability then the hashing function lowers the security of the overall cryptosystem. No collisions have been found for any of the SHA algorithms other than SHA-1, which apparently had its security lowered to 2^60, meaning with a given file and hash value, you could find another file with the same hash value after producing 2^60 outputs. So it would be bad to use this hash algorithm produce a key for a symmetric cipher, because even if the password is 128 bits a collison producing the same output hash value could be found after 2^60 attempts.