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I remember that one time when I was playing a level a sign had an Image displayed on it. How do you do this? I know it has something to do with <> codes but I don''t know what the code is. I've tried <img> but it doesn't work. Anyone help?

Hiya,

<img> won't work because 'img' is a BBCode tag. You have to use HTML which is <img src="link">, this topic will help you:
viewtopic.php?f=15&t=10094#p93178

I will warn you, I've used images in a few signs in my levels in the past and sometimes they are really slow loading and don't show up at all.
So they don't work amazingly well. But I guess they're a nice touch if you need them.

The only situation I could imagine for using an image on a sign is describing the location of a checkpoint, as an alternative to "press down under here and here...". Normally you don't need them for making a good level.

Reminds me of an image of an arrow pointing up and a boulder smashing you right afterwards.