Go get a good PGP client and generate your own PGP key first. Try Kleopatra or Cryptophane (that's what I use on Windows)

Then (skip to 5 if you're using a GUI based client like Cryptophane):
(copy and pasted from an old guide I had laying around to teach newbies)

Bitcoin-otc quickstart guide
Here's how to get quickly up and trading on bitcoin-otc on Ubuntu.

1) First off, connect to the IRC channel here. Choose a username.

2) Start a private chat with the gribble bot, in the IRC window, so you don't flood the channel messing about. All future IRC commands are to be entered into this private chat with gribble.

/msg gribble ;;help

3) Generate a gpg key (if you don't already have one). See here for details. At a command prompt, type:

gpg --gen-key

4) Publish your key.

gpg --list-keys --keyid-format long

Look for something like:

pub 4096R/46ED38A2A668A578 2011-02-18

Take the 16 digits following the slash, that's the KeyID. Now push:

gpg --send-keys --keyserver pgp.surfnet.nl 46ED38A2A668A578
gpg --send-keys --keyserver pgp.mit.edu 46ED38A2A668A578


5) Register with gribble, back in the IRC chat window with gribble:

;;gpg eregister Nick KeyID

After registering, use eauth to authenticate


;;gpg eauth BobJones


6) Gribble will spit back a http:// url. Copy that and run (if you're using commandline):
wget -O - http://bitcoin-otc.com/otps/46ED38A2A668A578 | gpg --decrypt

else(using GUI):
Navigate to that site and copy the text. Paste in the 'Message' tab and decrypt it.

7) Now take the output and verify with gribble:

;;gpg everify freenode:#bitcoin-otc:6132ffd1c3c4468e40303d844f3e30661bc34617054f7cc5e3fa03c8b41c376e

You should now be authenticated! Happy trading! Some useful gribble commands:

See the current exchange rate:

;;bc,mtgox

See orders for canadian dollars:

;;book cad

Privately message someone online:

/msg BobJones

Leave a message for someone offline:

;;later tell BobJones Hey there big guy!


edit: added GUI stuff.