There seems to be a bit of a problem with the way that Kmail and GnuPG interact that is somewhat confusing. If you do not have gpg-agent running by default, then Kmail will just tell you that it could not do anything when you try to sign or encrypt a message, giving you the rather unhelpful error, "Bad passphrase."

My solution to this was to use the two following scripts:

The first goes to ~/.kde/env.

#! /bin/sh

eval $(gpg-agent --daemon)

The second goes to ~/.kde/shutdown.

#! /bin/sh

if [ -n "${GPG_AGENT_INFO}" ]; then
  GPG_AGENT_PID=$(echo ${GPG_AGENT_INFO} | cut -d: -f2)
  kill ${GPG_AGENT_PID}