When you sign a user ID on a key, you should first verify that the key
belongs to the person named in the user ID. It is useful for others to
know how carefully you verified this.
"0" means you make no particular claim as to how carefully you verified the
key.
"1" means you believe the key is owned by the person who claims to own it
but you could not, or did not verify the key at all. This is useful for
a "persona" verification, where you sign the key of a pseudonymous user.
"2" means you did casual verification of the key. For example, this could
mean that you verified the key fingerprint and checked the user ID on the
key against a photo ID.
"3" means you did extensive verification of the key. For example, this could
mean that you verified the key fingerprint with the owner of the key in
person, and that you checked, by means of a hard to forge document with a
photo ID (such as a passport) that the name of the key owner matches the
name in the user ID on the key, and finally that you verified (by exchange
of email) that the email address on the key belongs to the key owner.
Note that the examples given above for levels 2 and 3 are *only* examples.
In the end, it is up to you to decide just what "casual" and "extensive"
mean to you when you sign other keys.
If you don't know what the right answer is, answer "0".
