I have the same problem creating signature with photo in Windows Live Mail.
I have tried all the solutions that have been offered on forum but still get a red X where my logo is supposed to be.
Inserting an image into an email signature should not be this difficult! Is it something to do with the size of my image or the format? Please advise on what is the recommended size. Or if Microsoft can come up with a painless fix to this basic function every email provider should have.