First you host the pic on a site like photobucket. Then you click the link to the left that says "update signature" and put the code in your sig block (should be <a href.... something></a>) You'll likely find you need to resize it or it will be giant. I have "width = "400">" as the end BEFORE the </a> that allows me to resize any photo rather than guess and check adjustments on the host site.
Re: How to...