I think it's basically just sticking some text right across the graphic (making it transparent or w/e) and saving copies of the image as a PSD and JPG. Upload the JPG for all to see and if you let somebody else use it, just take out the text from the PSD version and go from there. That's just how I assume it's done cuz I wouldn't anticipate it being mondo complicated
or another way to make a 40x40 image thats transperant. Then right your name or whatever on it. Then go to edit-define pattern. Then on you sig, template, whatever make a new layer, goto edit-fill then select your pattern. Then change the opacity of your layer to about 20.