Due to popular demand, I’m posting an updated version of my iPhone html email signature that’s more broadly compatible with a range of email clients. This version of the html code replaces the CSS inline encoded background image with a standard image tag.
The code below has been tested to work (as of 09.29.08) in Apple Mail.app 3.4, iPhone 2.0, Outlook 2003, GMail (new version), Yahoo! Mail (new version), Hotmail and MobileMe.
Please note that when using this version, your recipient will almost certainly have to click a button or link to display the image unless you are already a “trusted sender.”
<div style=“font: 10px ‘Lucida Grande’,Verdana, Arial, Sans-Serif;
line-height: 18px;
color: #525252;
margin: 6px 0;
padding: 6px;
border-top: 1px #999999 solid;
border-bottom: 1px #999999 solid;
background: #fff;
height: 58px”>
<img src=“http://dfbills.com/images/avatars/iphone.jpg” width=“63” height=“57” alt=“photo” style=“float: left; margin: 0 5px” />
<p style=“margin: 0; padding: 0; float: left;”>
<strong>David F. Bills</strong><br/>
<a href=“http://dfbills.com”>http://dfbills.com</a><br/>
sent from my mobile</p>
</div>

Too bad you still need a jailbroken iPhone to install this properly. Thankfully, this particular modification tends to stay in place across upgrades- including 1.4 to 2.0.
For more information on the full hack, see my previous posting: Set a custom css signature on your iPhone.
Update 1: fixed curly quotes in code
Update 2: Another point to note is that the Microsoft HTML renderer, in both Outlook & Webmail, will not allow padding on IMG elements. In my example, I’ve taken 6px of padding out of CSS and moved it to the actual JPG.

Update 3: Make sure to reboot after updating the .plist file on the iPhone.
Update 4: Updated CSS code to finally wrap properly. Thanks to Patrick Crowley for the help.