To insert an image in a signature, Outlook needs to use HTML for composing email messages. Create a new file called "signature.html". Insert your image using an absolute URL (ie. <img src="file:///C|/MyDocuments/images/kestrel.gif") add and format your signature text and save.

In Outlook Express select "Tools" > "Options" and then choose the signatures tab. Select "New" and then check the "File" option and "Browse" to your "signature.html" file. "Rename" your signature however you like and choose your settings (Default; Add signatures to all outgoing messages; Don't add signatures to Replies and Forwards...) Select "OK" to save.

Create and save a BMP or JPG file for your signature. (These are the only formats that Eudora recognizes.)

Choose "Tools" > "Signatures" which will bring up the signatures tab. Right-click your mouse button and select "New" from the context menu. This should automatically bring up Eudora Pro's internal signature editor. Select "Edit" > "Insert" > "Picture" Browse to your image file and select it.

Next, add the text of your signature and modify the properties of the text to make it look the way you want. Close the signature editor and save.