its off to bed for me now, but I will send you screenshots soon.

if you want we can bounce a few emails back and forth, I'll get you screenshots if it doesn't show up on your end.

its a faded postit shade of yellow and pops up when someone replies to a conversation you while you have that conversation open. I played around with it some more and found that it wasn't untill the second or third time hitting reply without closing the conversation that it would stop showing up.

I have noticed that when I use the update conversation button stacking replies in gmail that all the firegpg buttons on the page disappear.
I am using,
xp pro SP2 [when I noticed it, I'll check fedora 6 and firefox 1.5 when I get home]

I definitely see your complaint and one of the first things that came to my mind when I noticed that was to write the email out in abiword or openoffice or even, god forbid, ms office word. then copy over to gmail, sign, crypt and send. never leaves your computers ram in unencrypted form that way. I know its not a permanent fix but its a solid temporary work around, and you probably already have those grades in another document anyhow.