I tried playing with that feature of adding a signature banner also, with the same results. I had just figured it was due to my over-long signature that I already had, and it not having enough space for even more.
What I don't like about the "upload signature" feature is that it centers it. Unless that is what you want of course. I don't think there is an option to align it to the left. Only way to do that is to upload your image to your gallery or another site and then use the IMG tag in the signature area.