The instructions apply to Mac OS X 10.4 (Tiger) and later.

The keyboard shortcut isCommand+,(comma).

Highlight the signature you want to edit.

Mail preferences

Make sureRich Textis selected underMessage Formatfor formatting to be applied to signatures.

For more advanced formatting, compose the signature in anHTML editorand save it as a web page.

bring up the page in Safari, highlight all and copy.

Signatures tab

Finally, paste into a new signature in Mail.

This will not include images, which you’re able to add using the above method.

Mail preferences > Signatures

Formatting tools in Mail

Composing tab

Composing > Rich Text