"So, do police agencies have people who know enough about the mistakes people make with Tor and Bitcoin?"
I met a researcher who did some work on attacking Tor, the results of which were given to law enforcement agencies. He was a bit light on details, but the basic idea of his approach was this:
1. You narrow down the geographic location of your target. Not hard in the case of the Silk Road, since there is a physical package being shipped.
2. You connect to your target's system, and modulate the latency of packets that you send. This is a covert channel.
3. You have a van rolling around the geographic region you believe the target to be in, and listen on wifi frequencies. When the covert channel is detected, you home in until you have located the target computer.
Obviously you can defend against this sort of attack by just not using wifi, although similar attacks at the ISP level are possible. Cover traffic helps with this, assuming the covert channel has low tolerance to noise (this may not be true; again, few details were given). It is also wise to avoid connecting from your house, if possible, and to use a public location where you can quickly shut down your laptop when you see the cops.
Or, you know, you could not sell large quantities of illegal drugs over the Internet, since it is basically asking for trouble.