the pic must first be uploaded to your album.. then you can take the [url] link it provides and put it in your sig...
1) Click on your Name up top Corner right
2) On your userpage on the right side, scroll down to find Albums. Click on Show All Albums
3) You'll see your Album (pictures) page. Click on Add an Album
4) Create your album, make it public. The Album is ready
5) Now click the Upload Pictures... there you will see the upload option - upload your pic
When done you will get a BBCode URL (the one with the [] brackets - copy that and put in your sig... then your set