OpenPGP (the standard for PGP) is an email encryption and digital signing standard which is similar to S/MIME. OpenPGP works with public and secret keys. Public keys can be signed by other public keys (although in practice most keys are only self-signed). PGP public keys can be published to public accessible key servers. Public keys can be downloaded from public key servers.
OpenPGP supports two forms of encoding: PGP/MIME and PGP/INLINE. PGP/MIME encrypts and signs the complete MIME message and has full support for HTML email. With PGP/INLINE, every MIME part has to be individually signed or encrypted. PGP/INLINE support for HTML email is limited and is not supported by all email clients. Because PGP/INLINE has to scan the complete MIME message, PGP/INLINE is more resource intensive.
Because PGP/MIME keeps the structure of the original message intact, has full support for HTML and has better performance, PGP/MIME is strongly advised.