So the first thing that you'll need to do before you begin encrypting and decrypting anything is create your key pair. This consists of your publickey and privatekey.
{ insert instructions on getting to a terminal here }
The first think that you'll need to do is open a terminal and run
gpg --gen-key
This will prompt you with a question asking what kind of key you want.
Please select what kind of key you want:
(1) RSA and RSA (default)
(2) DSA and Elgamal
(3) DSA (sign only)
(4) RSA (sign only)
{ insert discussion of RSA and DSA here } but for now let's choose RSA and RSA. So type 1 and hit return.
Choosing a key size can often times be a confusing task. The larger the key size the more secure your key but depending on what device you are using, the action of encrypting and decrypting using a larger key may cause performance impacts that you do not want to deal with. With most modern laptops and desktops this shouldn't be a problem so 4096 or 8192 (if offered) should be fine to use.
So when prompted with the message
RSA keys may be between 1024 and 8192 bits long.
What keysize do you want? (2048)
Feel free to reply with any size that you feel fits your need.
For more information there is this fantastic explanation of the pros and cons between 2048 and 4096 length keys.
This is largely dependent on how you plan to use a key. The important thing to note is that since your key can be renewed it doesn't really provide much (if any) security benefit.
So when prompted with
lease specify how long the key should be valid.
0 = key does not expire
<n> = key expires in n days
<n>w = key expires in n weeks
<n>m = key expires in n months
<n>y = key expires in n years
Feel free to enter 0 if you want your key to last forever. We will go over revoking your privatekey if you have become compromsed later.
This is pretty self explanatory. Name, email and comment describing the key. I like to include my online handle (Nolski) and some words describing the machine I'm using it on (ex. Nolski - Laptop Personal)
This is important
http://security.stackexchange.com/questions/5096/rsa-vs-dsa-for-ssh-authentication-keys#answer-5100