I use PhotoShop 7 but you can use just about any picture editing software. Paint Shop Pro is an ok program to use and its free for the first 30-60 days I think.
Basically...what you need to do is to copy a picture or make a picture and save it somewhere where it can be accessed from the internet. Your picture gallery here on RCNT is a good place for example. Then, once you have your picture uploaded you can type a link to it in your profile.
If you look at your profile now in the box for signature you will most likely see an internet site surrounded by the tags [img ] and [/img ]. The board will take whatever link you enter between those two tags and display it as a picture. Give it a try and let us know if you run into any problems. I'm sure we can get you creating your own sigs in no time flat.