I always thought GIFs worked with the desktop patterns and photos. If you download GraphicConverterX 4.2.1 or use something similar perhaps you could try converting re-saving GIF as a JPEG and then trying it again? I'm not sure if that's the simplest solution, but it might work.
With regards to the fancy signatures, I think there's some way to upload your own graphics while you register with MacNN. They do look cool!