The Mobile Me Gallery interface doesn't support hot-linking to its images. i.e. there is no explicit URL that will allow you to link to a specific image.
The solution is to download the image from the Mobile Me Gallery, then
upload it to a free hosting service, for example ImageBucket, Flickr etc,
which do allow direct access to images.
We apologize for the inconvenience, but there's no reliable workaround the
Mobile Me Gallery restrictions.
You need to specify a image hosted on a free image hosting site like
Flickr, ImageBucket etc.
An example would be http://farm1.static.flickr.com/15/19176774_a70c1b7351.jpg
We wanted to use images from the photo library initially. However if we
inserted a local image in the email, most email readers like Outlook,
Thunderbird or other web-mail readers do not display it, because this has
been, and still is a big spam issue. Currently only Apple products display
inline-images.
In the end, we compromised by referencing an image hosted on the Internet.
We have found an problem with image URLs that have spaces in the URL. This may cause the Mail Application to crash on iPhones running 3.0 or later. It appears that any image url in html sent to the Mail app will cause it to crash. (spaces in other html like anchors etc. does not appear to have the same issue).
Solution or Workaround is:
a) When naming your images, make sure you do not put spaces eg. "my picture.jpg" should be "mypicture.jpg", "my_picture.jpg" or "my-picture.jpg" when you upload your picture to the website that is hosting your image.

Today our update Signature application was approved for download by Apple. The update includes some fixes for iPhone 3.0 compatibility.
We took the opportunity to add functionality to support Facebook and LinkedIn users who have user-defined names as part of their URLs instead of just numeric ids.
Join hundreds of satisfied users, visit our Signature page for more details

A lot of people asked us if there was any way they could try Signature for free. So we obliged. From today, you can download Signature Lite for your Apple iPhone / iPod Touch.
Signature Lite allows you to customize one signature and add one hotlink. It's the perfect choice if you only have one signature and want to add your image and details. Once you try it, we're sure you'll want to upgrade to the Pro version.
*** Update: this issue has been resolved in latest release ***
We have found an incompatibility running Signature under iPhone OS 3.0. If you have upgraded to OS 3.0, pressing Test Hot Link in the Edit Hot Link view may cause the application to quit. We have submitted a fix and waiting for Apple approval.
*** Update: this issue has been resolved in latest release ***
Currently Signature only supports the public profile url if you have not created a custom username. Signature has been modified to also accept LinkedIn usernames. The updated application is currently under review with Apple and will be available soon.
Currently we only support the non custom url format ie. http://www.linkedin.com/pub/your-name/number/number/number
The workaround until the next update is either
a) Check if you have the old style link stored somewhere e.g. you emailed a friend or business colleague
*** Update: this issue has been resolved in latest release ***
The new username feature from Facebook was released after Signature was released in the Apple Appstore. Signature has been modified to also accept Facebook usernames. The updated application is currently under review with Apple and will be available soon.

Whether its business or pleasure, we all have multiple roles in our lives. It could be several businesses, hobbies, clubs, friends etc. We wrote Signature because we wanted to use it ourselves. I'm sure many other people will too.
Today, we're excited to announce Signature 1.0 is available on the Apple iTunes AppStore for iPhone and iPod Touch.
Whether it's a new email or one that you are forwarding or replying to, add your personal touch with one of 6 fully customizable emails.