Each user creates a public and private key pair. The private key is protected by a pass phrase that the user chooses when creating the pair. This pass phrase may be arbitrarily long and may have any alpha-numeric characters. It is VERY important that the pass phrase is not forgotten. Encrypted messages can not be deciphered without the private key pass phrase.
Longer keys take longer to use, but offer higher levels of security.
The public key is used to encrypt messages for other users and to authenticate messages. A message for another user is encrypted using their public key. Once encrypted, the file can only be deciphered using their corresponding private key and pass phrase. In this way, files can be encrypted for only specific users to read. PGP can also encrypt local user files.