You have to have the image hosted somewhere before you can put it in your signature. I suggest imageshack, where your current signature image is right now. Some steps now.
-First, save the image you want in your signature to your computer.
-Next, go to
http://www.imageshack.us/
-See the "Browse" button? Click it.
-Navigate to where you saved your image in the little pop-up window and double-click on it.
-Once done (And the pop-up browse window is gone) click the "host it!" button at
http://www.imageshack.us/.
-Allow the image to be uploaded. It may take some time.
-Once done, you will be taken to a page with a list of links.
-Copy the link listed in the box next to "Hotlink for forums (1)"
-To do this, left-click once inside the box. All text should be highlighted. Once done, right-click somewhere in the box and select "Copy."
-Now, go to the TMF UserCP and go to your signature options. Paste the code in and save.