The GPG key is stored in the repo:
http://salix.enialis.net/i486/current/GPG-KEYThis key is used to sign the CHECKSUMS.md5 file, so by using it you are verifying that all packages are what they intended to be.
Case 1: Someone hacks into a mirror (or even the main repo) and replaces a package (for example openssh) with a hacked one. He can recreate the CHECKSUMS.md5 file but he cannot sign it with the gpg key, as he doesn't know the passphrase. Hacking into a poorly secured server is far easier than breaking gpg encryption. If he cannot sign the CHECKSUMS.md5 file properly, the key will not be verified by the package manager and the user will know that something nasty is going on. If the repo is not signed, you can only find out by calculating md5sums for each package and checking them one by one against the good ones (something that noone will ever do).
Case 2: Someone pretends to be a contributor and offers to mirror the repo, so he can replace some packages with hacked versions. If he changes something without signing the CHECKSUMS.md5 file, it's the same as Case 1. He can create a fake gpg key, but as soon as someone checks the gpg key against the one in the main server, or tries to use a legitimate mirror, the key will fail to verify. So, the hacker will be uncovered, probably sooner than later.
This was a concern I often had with some of the zenwalk mirrors and is still valid as the "management" doesn't care about such "silly" issues (gpg was proposed by someone else in the past, but - as usual - received no reply). There is no easy way to tell if a zenwalk mirror repo includes hacked packages. I'm not saying they do, but it would be trivial for someone to offer a (faked) mirror and profit from it.