From what I know, How I do it is:

I go to a web hosting site, I use www.imagestation.com And then you download your images.
Once that is done, you click on the image(signature) and go down to properties. when it pops up, right click on the picture URL (should look like http://948376 and end with .com) Copy it.
Then you come back to your user cp, and under the profile (signature part) paste it in. make sure it starts with [IMG] and at the end it says [/IMG] thats it. If you need more help, pm me and i will see it I can help.

Mine looks like this under the user cp:

[IMG] http://www.imagestation.com/picture/...8c54873789.jpg

then you add [/IMG] at the end. Does this help?