it is actually switching to openpgp at the new better looking version 2.0 (I think they are like 1.4 now or some shit).
as it goes now it is:
on your screen plaintext --> the java applet encrypts it in 1024bit blowfish (fucking HUGE keyset) --> browser sends this out over an ssl channel which is 128bit (I think it is DES) --> then that get descrypted on the server and stored in blowfish 1024 (the same as before).
then you want it is reverses that process... obviously it is a little more involved than this - but this is why it is so disgustingly secure if you go from hush to hush or ef or whatever.
if you go to an insecure partner, then it is plaintext on the screen, sent 128bit ssl (DES) to the server, and then sent plaintext from the server to the outside server - a whole lotta suck.
and part of the reason this is good is even if you could break the 128DES, which is really fucking hard, you would only get down to the 1024 (which would be hard to tell b/c it is all gibberish so it is hard to tell when you've broken it).
then 1024 would take longer than forever to brute force.