Like Zaraque said, go to your Profile and then Forum Profile Imformation and scroll down to the signature box. To make my signature I use Tinypic, it's easy and free.
http://tinypic.com/Save your picture somewhere were you can find it and click 'Browse'.
Look for your photo and double click it.
Make sure 'Image' is bubbled.
You can change the size of the photo. [ I usually don't ].
Then click 'Upload Now!'
You may need to fill out a Captcha [ Which is pretty easy ]. If you don't know what tpo do with it click the '?' button.
Next, copy the that says, 'IMG Code for Forum and Message Boards'.
Past it in your signature box.
Click, 'Save'.
And you're done!
I hope this helped.
~~Alaskan~~ [ And no, I'm not copying off what animals_rock said, animals_rock posted that post when I was about to post mine ].