You no longer need to go get a free Thawte certificate or go anyplace else to get one -- Keychain Access now has a Certificate Assistant that will generate a self signed certificate for you!
Open Keychain Access (in /Applications -> Utilities), and in the Keychain Access menu, select Certificate Assistant (it's the fourth choice). Click it, follow the on screen directions. You can now encrypt and sign your email -- encryption requires your email recipient's public key.
[robg adds: This hint was also submitted at nearly the same time by boredzo, who pointed out the assisant's capabilities:
Mac OS X Hints
http://hints.macworld.com/article.php?story=20050522045225980