I sign all of my outgoing emails using Thawte (now Verisign) certificates. The problem with encryption is finding the other person's keys. I have yet to receive a signed email from someone else, so I cannot send encrypted messages.
It seems to be a problem primarily with critical mass and secondarily from implementation. Not enough people use signed/encrypted email to spur others to using it. Additionally, certs cost something. Even free certs cost effort in understanding the need for them and figuring out how to generate/download/install them. Then there is the whole problem with "trusted" certs...
Implementation wise, things are only a little better. Once the certs are installed, (desktop) mail clients handle the signing/encrypting pretty well. But I can't sign messages from a webmail client or from my phone.