If you run into an issue when trying to upload a signature image when you receive the following error...:
... there is something you can do.
At the top right of the page, there is a link titled "Settings". This will take you to your User Control Panel (UserCP). There are links along the left side of that page. Click on "Edit Signature".
The biggest problem people run into is that the editing box for their signature appears blank, but in reality there is still a link to an old signature in there. Since the signature no longer exists on the server they are linking to, it will no longer show as an image. To clear out the old link, you must first switch the "editor mode". The button to do so is located just above the smilies on the right side of the editor box, as shown here:
When you click the button, the code for your old and defunct signature will appear. Delete this code, then insert the code to your new signature image.