Encryption is a tool that makes it nearly impossible for a third party to read the message. Your address will be encrypted so that if Silk Road is ever compromised, it would hold no information about you. Encryption will allow your vendor(s) and only your vendor(s) to access to your personal information.

First, we need software that will handle the PGP encryption. In your regular browser on the clearnet, go to 'http://www.gpg4win.org/download.html'. (No apostrophes.) The latest stable version is what you want and it usually has a green box around it. (Full version) Download and install it but when you get to the Choose Components page, only select GnuPG, Kleopatra, and Gpg4win Compendium. Install those components.

Next, open Kleopatra. If it doesn't ask you already, you need to create a new OpenPGP key pair. (File --> New Certificate)
For your name, enter your Silk Road user name.
For the email address, simply write '<user name>@silkroad.onion'. [The email address does not have to be valid.]
Click Next, Create Key. Kleopatra will ask you for a passphrase for this key. Choose one that you've never used before and Write It Down. Kleopatra will then make your key pair.

Next step is to import your vendor's public key.

Go back to Tor Browser and back to Silk Road. Find your product (check your cart) and click the vendor's name. On the vendor's profile page he or she should list their GPG public key. It will start off titled:
-----BEGIN PGP PUBLIC KEY BLOCK----- and the key will look like gibberish. Copy everything from:
-----BEGIN PGP PUBLIC KEY BLOCK----- to
-----END PGP PUBLIC KEY BLOCK-----, INCLUDING the begin and end lines. You want and need it all for it to work. Copy the key to your clipboard. (Ctrl+C or right click --> copy)

In your system tray, Kleopatra will have an icon. Right click the icon --> Clipboard --> Certificate Import. That will import the vendor's public key. [Many people have had trouble with this step. The system tray is the space to the left of the time on Windows. Kleopatra will have an icon there when it is running.]

Now you are ready to encrypt your address.

Open up Notepad (Win+R --> notepad) Type your address as it would appear on a letter. This is what your vendor will see. Double check that your address IS correct. (Seriously, do it.) Copy your address to the clipboard.
Right click Kleopatra's tray icon, Clipboard, Encrypt. Here you choose who you would like to send the info to. [Remember ONLY the recipient(s) can decrypt your message]
Click Add Recipient and select your vendor(s) key.
Click Next and Kleopatra will encrypt your address.
Click Ok.

Now go back to Notepad. Paste what is on your clipboard. (Ctrl+V, Right click --> Paste) Your address is now encrypted in a way that ONLY your vendor can decrypt. To anyone else, your address is gibberish.