Encryption can solve many of the security problems with email. By encrypting the message it can only be read by those able to decrypt it. Encryption also allows one to sign a message so that if it is modified, the reciever will be able to detect that it has been changed. The reciever can also verify the signature is from the person who claimed to send the email.
By using encryption, e-mail can be made more secure the physical mail. Everyone should be using encrypted email, all the time. Why all the time? If all e-mails were encrypted then people watching your e-mail would not be able to differentiate the "important" emails from the "normal" e-mails.
You can start using encrypted e-mails by getting a copy of GnuPG.