Truffle is a hard mode NPC and will only show up once you have constructed a house in an above-ground mushroom biome with Mushroom Grass Seeds, or by using the Clentaminator in a Jungle. If you want to do this but don't want to take up a lot of surface space, a good way to do it is to build a skybridge of mud off of a Floating island, plant Mushroom Grass Seeds, and then wait. (Note that the skybridge must be 2 mud blocks thick, and that the house must meet all of the other normal NPC house requirements.)
If you are having trouble with getting Truffle to move in, it may help to construct the house purely out of Glowing Mushroom materials (Walls, doors, etc.). Also leaving the house with no floor and instead building it straight onto the grass of the Glowing Mushroom Biome might help.
"There's been such a huge rumor that's being spread about me, 'if you can't beat him, eat him!'"
"Everyone in this town feels a bit off. I woke up to the clothier chewing on my foot last night." (Only if the Clothier is present)
"As if living underground wasn't bad enough, jerks like you come in while I'm sleeping and steal my children."
"You haven't seen any pigs around here have you? My brother lost his leg to one."
"I tried to lick myself the other day to see what the big deal was, everything started glowing blue."
"Between you and me, [Dryad's name] is the only one I trust. She is the only one here who hasn't tried to eat me or use me in a potion." (Only if the Dryad is present)
"Everytime I see the color blue, it makes me depressed and lazy."
"I don't know the 'Truffle Shuffle', so stop asking!"
(the "Truffle Shuffle" is a reference from "The Goonies", an old movie filmed in 1985)
Note: Upon adding a new name, make sure you add it in alphabetical (ABC) order.
All his names are a sort of mushroom.
Mushroom NPC - Terraria 1.2 Guide New NPC!
Overworld Glowing Mushroom Biome
Truffle the Mushroom NPC Confirmed! - Terraria 1.2 Guide New NPC Confirmed!
Example house to summon Truffle
Terraria - Truffle & my Mushroom Biome