Cat,
First off, it the photo has to be hosted somewhere. I hosted my own on my ISP's server web space. It needs to be 500 X 100 pixels or less and I think 150k or less.
Then you needs to add a line like below to the signature section in your profile. It would look something like this.
http://www.your-server.net/cats-space/your-pic-name.jpg
Above is example depending on where it is hosted (your-server.net), the directory within (cats-space), and the pictures name (your-pic-name.jpg).
This line need to have [img] at the beginning and [/img] at the end. It would not allow me to put it in, so I had to say it this way..lol
I hope this helps at least a little...lol if you would like more help, just email me. I would be glad to help you get this done as I am sure someone else on here might also do.