There is already a thread in off topic I believe for testing sigs and stuff. Also, you could just look at an old post of yours to see the changees as they are all dynamically updated whenever you change your avatar/signature.
You need to use a program to resize it 100x100 pixels max. Photoshop is the most common, but paint works too (just can't resize with it). If you have a digital camera program, it usually has tools for resizing pictures.
I went to google images. Found a picture I liked. Opened it in photoshop, resized it to be 100x72 pixels (it wasn't a square intially) and then hosted it.
Argenin there is a thread on Fan Works that tells you how to make a sig and avatar in detail. That is how I learned to make mine maybe you can learn how there. It is a very good thread.