Is this a frsh Gutsy install or a Feisty upgrade?  If it was an upgrade 
from Feisty there is a manual step needed to install the correct skeleton 
file for the gnupg conf file.  Please see the Gutsy release notes.  

If it's not a Feisty upgrade or the problem persists with a new user 
created after following the steps in the Gutsy release notes, please file a 
new bug (don't reopen this one) and subscribe me to it and we'll get it 
sorted out.  I've got the working by default on several machines, so I 
think thing are fundamentally sound, but something is incorrect in your 
configuration.

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kmail don't ask the phrase for gpg-encrypted mails
https://bugs.launchpad.net/bugs/15485
You received this bug notification because you are a member of Ubuntu
Bugs, which is a direct subscriber.

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