If you are using a link off site such as imageshack or tinypic use the tags. If you uploaded it from your computer use [SIGPIC][/SIGPIC].
Possibly a stupid question but sometimes the most obvious things elude us. Are you clicking the "Save Signature" at the bottom once you have it uploaded.
It wouldn't show up in their profile if they didn't save it. Do you have this button checked when you try to make a post?