I had the same problem with Windows Vista trying to run Outlook 2003. I got around it as follows.
Open a New Message in Outlook.
In the Menu Bar that includes Send on the left side, there should be an Options button.
Click on the arrow button located just to the right of the Options button.
Click on the Email Signature button.
Alternative, you can also highlight the email signature of a new message and right-mouse click.
You can create a new email signature right there by block copying it in from the outside. You can also edit existing signatures there. It seems to work better than using Word's HTML editor, too.
I hope this helps everyone else. My signature now includes my updated business logo created as a .jpg file.