Vne is true airspeed...
Recently read an article in Aviation Safety (Jan 2011 issue I think) with regards to ASI markings. It mentions that all the markings are based on IAS, EXCEPT for Vne. Vne is actually based on true airspeed, therefore, if flying at higher altitudes, your Vne will be reached even before your ASI shows you are near Vne.
If exceeding Vne, the effect is the airspeed can cause surface flutter. However, I can't understand how Vne is based on true airspeed? If the air density is lower, there would be less molecules hitting the surfaces, so how can the flutter occur at that lower IAS?