Shouldn't it have looked in the usual location (users/me/app data/roaming/etc), not found it and asked me to identify the location?
The concept of Multibit wallets works in such a way that you have to open a wallet
before you can make any transaction, which means that if you could send something, then a wallet was already open. If it didn't crash or anything, I assume that you had already opened your Truecrypt wallet. The other possibility is that you actually didn't delete the original wallet (but if you are certain the Multibit folder in AppData is empty, then this is not the case).
Shouldn't I have had to put my password in or something?
I'm not sure how Truecrypt works, since I've never used it. But if you didn't set up a Multibit password, then it's OK if it didn't ask for one.