Signature Pics are limited to 200 pixels high x 500 Pixels wide.
In User CP click edit signature
In the box for option 1 Enter the URL for an Imageshack (or other hosting service) picture in the box.
Click Save Signature
The picture should be visible with a Brown Font Insert Signature Picture next to it
Click Insert Signature Pic
In the text box [*SIGPIC][/*SIGPIC] will appear (Minus the astericks I had to put in here). Click the insert Image icon, delete the HTTP:// and paste in the URL for your hosted pic.
Click OK
The picture now shows up in the Text Box as well
Click Save Signature and all should work.
It's tricky, but when you choose Insert Signature Picture, you still have to enter the URL for the picture (assuming it's hosted).
Looks something like this:
Sometimes the sig still doesn't show in a particular thread. In the thread where the signature is missing go to one of your posts.
Choose edit
Go Advanced
Scroll down and select Show your Signature