Tomas Touceda advertised a new project on Full Disclosure.
The idea sounds good, so I will keep an eye on this very interesting project.
Though I would like to know more about the methods that were used for encryption and stenography.

Code and explanations are on the ESFS project homepage.
Beyond the pratical usage, I wonder if it can offer anyhow better resistance to statistical analysis that usually defeat stenography. The author addresses partialy the point on the mailing list:

What I meant with hide is that, since it uses the LSBs, you can pick
any image, and “find data” in them, so it makes it a little bit harder
to know where you actually have data, and if you really do.

To this, a reader named stormrider pointed out an interesting research document (PDF), which is a state of the art of the limitations of stenography and the attacks against it. Is it really a dead-end ?

This is indeed a very interesting field of research.