How do I install pgcrypto on Windows?
Depending on the full error message you receive (I have a hunch you didn't post it in full) you probably are trying to run the script by using a login role which is not superuser:

C:\Users\Administrator&gt;c:\PostgreSQL\9.0\bin\psql.exe -U milen -f C:\PostgreSQL\9.0\share\contrib\pgcrypto.sql milen
SET
psql:C:/PostgreSQL/9.0/share/contrib/pgcrypto.sql:9: ERROR:  permission denied for language c
psql:C:/PostgreSQL/9.0/share/contrib/pgcrypto.sql:14: ERROR:  permission denied for language c
psql:C:/PostgreSQL/9.0/share/contrib/pgcrypto.sql:19: ERROR:  permission denied for language c
...