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Are files encrypted with gpg compatible with pgp? What about the other way? I recently learned the very basics of the procedures of using gpg to encrypt and decrypt files. But I don't have a lot of knowledge or good understanding of cryptology theory. I also hear about pgp. Besides the obvious and confusing -- at least to me -- resemblance of the name of one to the other, are the two system compatible with each other?

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I don't have a definitive answer, but they should be compatible; they both use the OpenPGP standard. –  Keith Thompson Jan 16 '12 at 6:24
    

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Yes, both GnuPG and the commercial PGP.com are implementations of the same OpenPGP standard; in fact, GnuPG was specifically designed to be PGP-compatible.

The only differences you might encounter are:

  • Different supported algorithms. For example, GnuPG supports the Camellia encryption algorithm, while PGP.com does not.

    This is almost never a problem, though, as every PGP certificate ("PGP key") lists all algorithms that the owner's software supports (or more precisely those which the owner prefers to be used), so a message's sender can always pick a supported one.

  • Various quirks and differences in really old versions of PGP (especially the original releases from before OpenPGP was standartized). However, both GnuPG and PGP.com can easily read (if not always write) messages in the old formats.

tl;dr: Yes, they are compatible.

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Is there any good practical reason one would choose the non-free PGP software at all? –  qazwsx Jan 16 '12 at 22:07
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@Problemaniac: Paid technical support, for a start, which is important in corporate use; an easy-to-use graphical interface (GnuPG has 4-6 GUIs but all of them are lacking, especially on Windows) including integration with Explorer and Micros~1 Outlook; various centralization features, including company-wide automatic mail encryption and a key directory service. Finally, the basic "PGP Desktop Email" used to be free (at least beerfree) from the beginning up to PGP.com v9 or so. –  grawity Jan 16 '12 at 22:11

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