Are you using a local account, IMAP or an Exchange based account?

I'm using an Exchange base account.

Sorry, as stated in the README this does not work. I need to find a bit of time
to play with Exchange to figure out the right way to order the MIME headers.
There is no guarantee that I will succeed, though.

I have changed the title to keep an bug on this open.

Note that issue#1019 states that encryption works with XP and OL2007 - There was
no change in the mIME stuff since then.

Note that
http://lists.wald.intevation.org/pipermail/gpg4win-users-en/2009-August/000340.html
reported a recpient not found problem with OL2007, MS Exhange 2003 and
2.0.0rc1.

And airflow.2010 at gmail.com reports
http://lists.wald.intevation.org/pipermail/gpg4win-users-de/2009-August/000201.html
Microsoft Exchange 2007 + Microsoft Office Outlook 2007 + PGP/GPG.
two subproblems which are different depending on if it is an external
or an exchange internal address.

For the internal address, the email sending just does not work, the button
leaves the window open.

For an external address it first seems to work but after a while there is an
error from the exchange with:
"Ihre Nachricht hat einige oder alle Empfänger nicht erreicht.

Betreff:    WG: Mailsubject
Gesendet am:      17.08.2009 18:28

Folgende(r) Empfänger kann/können nicht erreicht werden:

'externe at email.com' am 17.08.2009 18:28
      Diese Nachricht konnte nicht gesendet werden. Versuchen Sie es

später erneut, oder wenden Sie sich an den Netzwerkadministrator. Fehler:
[0x80004005-00000000-00000000]."

Escchange does not work - that is as expected. GpgOL even tells about this
during its first startup.

Hmmm. I didn't notice the hint at the first startup.

It is only shown on the very first start. FWIW:

#define ANNOUNCE_NUMBER 1

if ( ANNOUNCE_NUMBER > opt.announce_number )
  {
    /* Note: If you want to change the announcment, you need to
       increment the ANNOUNCE_NUMBER above.  The number assures
       that a user will see this message only once.  */
    MessageBox 
      (NULL,
       _("Welcome to GpgOL 1.0\n"
         "\n"
         "GpgOL adds integrated OpenPGP and S/MIME encryption "
         "and digital signing support to Outlook 2003 and 2007.\n"
         "\n"
         "Although we tested this software extensively, we can't "
         "give you any guarantee that it will work as expected. "
         "The programming interface we are using has not been properly "
         "documented by Microsoft and thus the functionality of GpgOL "
         "may cease to work with an update of your Windows system.\n"
         "\n"
         "WE STRONGLY ADVISE TO RUN ENCRYPTION TESTS BEFORE YOU START "
         "TO USE GPGOL ON ANY SENSITIVE DATA!\n"
         "\n"
         "There are some known problems, the most severe being "
         "that sending encrypted or signed mails using an Exchange "
         "based account does not work.  Using GpgOL along with "
         "other Outlook plugins may in some cases not work."
         "\n"),     
       "GpgOL", MB_ICONINFORMATION|MB_OK);
    /* Show this warning only once.  */
    opt.announce_number = ANNOUNCE_NUMBER;
    write_options ();
  }

BTW: There is another short old report about exchange problems here:
http://wald.intevation.org/forum/forum.php?thread_id=624&forum_id=20

Using SMTP with GpgOL and Exchange seems to be work:
http://lists.wald.intevation.org/pipermail/gpg4win-users-en/2010-December/000572.html

Can anybody confirm this?