I've gone back and forth with my Gmail account and the use of a signature, for 2 reasons:
1) It's plain text
2) It's inserted at the bottom of the reply, even below the content in the email you're replying to. This is less than desirable!
So, I recently installed a Firefox add-on for the purpose of being able to have HTML signatures. Lo-and-behold, it also included an option to move the signature to the top of the email! It's very simple if you'd like to do this yourself, simply install the Better Gmail extension, restart your browser, and in the extension options enable 'Signature Float'!
Voila, the signature is where it should be!