I’ve faced with the same problem on Windows 7 + Outlook and on WinXP Home + Claws Mail. I use Gpg4win 2.0.2.
There does not seem any problem in signing and encrypting, however, when it comes to decrypting, all Claws Mail windows hang for ever. When I close those windows I get crash messages from Windows and right after all windows go away, pinentry dialog box appears and asks me for my passphrase… It never appears before I close all crashed Claws-Mail windows.
I’ve tried to use 1024 bit keys but it did not help to eliminate hanging.