Google’s Gmail now supports a unique signature for every email address associated with your account. So if you’re sending email from Larry@my domain.com, you can automatically have a different email signature than when you send from Larry@anotherDomain.net.
Google has also introduced rich text signatures into Gmail. Now you can change the colors or font size of your signature, or insert images and links right in Gmail — without any additional plugins, scripts or other workarounds.
Gmail users now are able to format text, add bullets, numbering, indenting and alignment your email signature. You can also insert images and hyperlinks into your personal signatures, adding a little creativity and flair.
The next time you log in and visit the Settings page, you’ll see a rich text editor in the signature section. Here, you can customize your signature by adding pretty formatting, links, and images — or decide to leave things nice and simple. 
While some argue that these features should’ve been introduced long ago, it’s nice to finally be able to create a personal signature that has a business card-like look to it. As of now, the mobile version still only supports plain text signatures.
More information is available at the Gmail Blog.
I’m delighted by this feature, but what if the image you want to use is on your drive? Perhaps gmail wants to avoid personal drives, but how do you create a URL for a local image?
#Tim, easy way to do this is to upload your image/photo to Google Docs and then link to it there.