Enigmail
Enigmail is an extension for encrypting messages and/or adding digital signatures. Its available for Thunderbird, SeaMonkey, Mozilla Suite 1.7.* and Netscape 7.2. Its an OpenPGP based alternative to the built-in S/MIME support, and can be used with other email clients that support just OpenPGP or a recent version of PGP. Which one is chosen frequently depends upon what your recipients support. They both provide similar services and use MIME to structure their messages, but have incompatible formats.
Some people assume that because S/MIME support is built-in that makes S/MIME a better choice. However, it's basically a backwater, just like the built-in news support. Enigmail is still being actively developed. S/MIME has the advantage of not requiring an add-on but both require a good bit of work to learn how to configure and use. Enigmail has an advantage in that it has extensive documentation and dedicated forums. Google has recently added PGP support to Gmail. There are several new email clients being developed just to make PGP easier to use with email such as MailPile. This may make encrypted mail more mainstream.
S/MIME requires certificates, which are normally issued by third certificate services such as Thawte, Verisign and OpenSSL. Certificates eventually expire and you need to keep old ones in order to read old encrypted messages. Free certificates just guarantee what email address was used. Paid certificates (class 2) attempt to verify who you actually are. OpenPGP is based on individually determined levels of trust. If someone sends you a key, and you trust it, then you can communicate with that person. There is no third party involved that you have to trust, which can make it a more practical choice.
For more information, see the Enigmail Project page. Email Self-Defence from the EFF is also a good getting started guide.
