The email encryption software allows you to send encrypted emails (duh). The public Key Encryption allows you to have a private key (for you) and a public key for persons wishing to send you something. They encrypt their stuff using the software and their public, but they cannot decrypt it, neither can anybody else, as you need the private key, (which will be with you), to do the decryption.
gnuPG - Free Email/Public Key Encryption
This software is the replacement for its commercial counterpart PGP. However this one is open source and uses severa strong encryption algorithms like: AES, ElGamal, DSA, 3DES, Blowfish, Twofish, CAST5, MD5, SHA-1, RIPE-MD-160 and TIGER to encrypt your emails.
Windows Privacy Tools - Free Email/Public Key Encryption
This free software for Windows acts as a front-end for gnuPG with all the required tools for you to encrypt your emails.
Freeware PGP versions
This page shown here shows you various free versions of PGP software avaible for you to download for different platforms.