Hosting
To be able to use the scripts and create a dynamic signature you should first make sure you have a hosting service which can actually host the signature and run the scripts.
A simple image host like Imageshack or Photobucket won't do because you will need to upload the php scripts as well.
You will need to find a host on which you can run php scripts, and it should have the imageGD functions enabled.
Most hosts that have php enabled have the imageGD functions enabled by standard so I don't think you'll have to worry about that, just make sure you find a host which supports php so it can run your scripts.
Since I have a few paid hosts myself and a server at home I'm afraid I do not have the need for any free hosts and therefor I don't know any free hosts supporting php either.
If anyone knows any or finds any please be so kind as to tell me so I can list them here.
Hosts
-------
www.dhost.info
- 100MB space
- easy FTP connection
- supports all the codes needed for dynamic signatures
Downside: They need to approve your request which can take about a week.