From: Raph Levien <raph@cs.berkeley.edu>
I think you're referring to the possibility that PGP 3.0 may use a public key algorithm other than RSA. However, if this is the case, it won't be compatible with PGP's installed base. In addition, I don't believe that there has been a public key encryption algorithm proposed which is free of patent controversy.
I have recently gone to work for PGP, Inc. PGP 3 will support both discrete log and RSA cryptography. It will interoperate with both, so that when you send a message to someone who has an RSA key, it will use RSA, and when you send to someone who has a discrete log (El Gamal/DSS) key, it will use discrete log algorithms. So there is full compatibility with existing keys, while allowing people to move to cryptography which will be patent free in the U.S. after next year. A free version will be available with this functionality, with source code. Existing users of PGP will hopefully find it easy to upgrade. I cannot say when it will be available, other than to say that the functionality exists for generating and using all these kinds of keys, and we have four programmers, including myself, working full time on getting this version out. Hal