GPGTools has been updated to v1.1.9. This update fixes a few bugs and adds support for GPG v1.4.1. The release notes are included with the download. Read the Favored Freeware entry for GPGTools here.
I never really understood the concept of GPG. Exactly how does it work?
Essentially, GPG is an open source encryption framework based off of PGP. More info: http://www.gnupg.org/gph/en/manual.pdf