EasyPG is a package used by GNU Emacs to simplify work with files encrypted by GnuPG (GPG). Extremely useful package, it has a bad habit of relying on external tools to prompt for the password. One of such tools is 'gpg-agent'. In Debian/Ubuntu this agent usually replaces 'ssh-agent'. It's a good tool, but it uses a GUI dialog to prompt for the password. This makes your work with EasyPG and Emacs rather uncomfortable.
There's a number of advices on how you can suppress that GUI dialog. I prefer another one, I simply removed 'gpg-agent'. It did not affect the functionality, since it was replaced by 'ssh-agent'. Now, EasyPG prompts for the password in Emacs mini-buffer